Reinvested-Portfolios Wealth Accumulations Starting in 1870
(No transaction costs, no taxes, annual January rebalancing at month average prices, diversified stocks vs. long-term Treasuries, stock leverage ratios of 0, 1, 1.6. 2.3):
The extra returns from going from 100% bonds (L=0; terminal wealth= 41x initial) to 100% stocks (L=1; terminal wealth=19,400x) are clear and massive.
The extra returns from going from …
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