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Finance

Historically speaking, stocks have been found to be no more risky than Treasury bonds. Over the past twenty years vast research has been done on this subject. Jeremy Siegel of the University of Pennsylvania's Wharton School stated that, "The safest long-term investment for the preservation of purchasing power has clearly been stocks, not bonds." Since the mid nineteen twenties, company stocks have average annual returns close to 11%, while on the other hand, Treasury Bonds only return with a little over 5%.
Currently stocks are on the rise. Since 1982 the reason for this is the declining risk premium. The return, or "risk premium," that is required is much less. This is for several reasons. Investors have realized not to be so fearful of the great unpredictability of stocks. Instead of dropping stocks in the short run, investors are learning to hold out for the long run to see huge benefits.
Secondly, Americans are now keeping stocks in accounts that require long-term......


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Approximate Word Count: 524
Approximate Pages: 3 (250 words per double-spaced page)

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