Capital Markets Spring 2020

I

Take the Long-Term View Navigating Through a Crisis

I • While it is tempting to sell stocks for the relative safety of government bonds, history suggests that stocks have outperformed over the long term ‒ Returns: over 20 year periods, stocks have outperformed bonds by almost 4% annually, which equates to nearly a doubling cumulatively ‒ Risk: equity standard deviation drops from over 10 points more than bonds in one-year periods to less than one percentage point more over 20-year periods

II

Percent of Time Stocks Outperform Bonds

III

100%

82%

74%

Stocks have consistently

67%

IV

outperformed bonds over the long term

V

VI

1-year

5-year

10-year

20-year

Source: Morningstar and Alger. Data is for 1950-2019 based on annual rolling periods. Stocks are S&P 500 and bonds are Ibbotson U.S. Intermediate Term Government Bond Index. The performance data quoted represents past performance, which is not an indication or a guarantee of future results.

9