Why Invest in Bonds!
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Author
Baker, Gary
Martin, James
Publisher
Washburn University. School of Business
Sponsor
Kaw Valley Bank
Issue Date
June 2005
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Alternative Title
Abstract
Typically financial planners advise investors to diversify, invest some of your money in bonds and some of our money in common stock. Is this sound advice? This paper examines thirty-five different holding periods and compare the return on large company common stock portfolios to the returns on long-term corporate bond portfolios. Each of the holding periods is thirty years long. The first holding period is 1940 through 1969, the second holding period is 1941 through 1970. The last holding period is 1974 through 2003.