Capital Markets Winter 2021

III

Long-Term Appeal of Stocks Lending vs. Owning

• U.S. stocks outperformed intermediate-term U.S. government bonds about two-thirds of the time over one-year periods since 1950, but beat bonds in every 20-year rolling period • The standard deviation of returns for stocks is almost three times larger than for bonds over one-year intervals but nearly equal over 20-year rolling periods

I

II

Proportion of Time That Stocks Outperform Bonds

III

100%

82%

75%

68%

IV

V

1 year

5 Years

10 Years

20 Years

VI

Source: Morningstar and Alger. Stocks are represented by the S&P 500 and bonds are the Ibbotson U.S. Intermediate-Term Government Bond Index. Data is annual rolling returns 1950 through 2020. Standard Deviation measures how much the portfolio’s return has deviated from its average historical return. The performance data quoted represents past performance, which is not an indication or a guarantee of future results.

22

Made with FlippingBook Publishing Software