[AR] Re: VSS Unity powered flight
- From: "Perry E. Metzger" <perry@xxxxxxxxxxxx>
- To: William Claybaugh <wclaybaugh2@xxxxxxxxx>
- Date: Sun, 8 Apr 2018 14:58:15 -0400
On Fri, 06 Apr 2018 23:45:01 +0000 William Claybaugh
<wclaybaugh2@xxxxxxxxx> wrote:
In the long run, ten year treasury bonds average 7%.
No US treasury security yields 7% long run inflation adjusted and
none ever has. If 10 year treasuries earned that, there would
literally be nothing else anyone would want to invest in given the
low risk. The yield would, of course, then be driven way way down by
investors entering the market.
Even the nominal rate of return of ten year treasury bonds is way
lower these days and has been for a long time, with the current
nominal rate being about 2.75% before inflation adjustment, meaning
basically you're nearly but not quite paying to hold them given
inflation.
Note that at many points, for individuals, the taxable events that
occur when coupons come due and when the bonds mature have been
sufficient to wipe out the inflation adjusted return as well.
Equities average 11-12%.
Not even close. From 1950 to 2010 or so, most of an investment
lifetime, you get an inflation and dividends adjusted average of 7%,
but only if you're holding over very long periods. If it was 12% a
lot of people would be dancing in the aisles, the difference in the
long term multiple is huge. Equities are, of course, not nearly as
safe an investment as treasuries unless you're going for very broad
indexes and can hold for long periods.
Perry
--
Perry E. Metzger perry@xxxxxxxxxxxx
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