Monday, February 22, 2016

Why you can't believe Shiller on LT equity returns

Recently, Business Insider featured a chart of long-term equity returns based on data from Bob Shiller.


The lesson was, the longer your time frame and the more patient you are, equities win. That`s been a lesson taught to generations. Based on this data, equities has become the foundation of any portfolio for anyone building a long-term investment plan.

While I would not necessarily disagree with equities being a major portion of a long-term portfolio, I would content that Shiller`s analysis is at best, exaggerated because of survivorship bias, and at worst, deceptive. It is reminiscent of glossy brochures and offering memorandums promising great things, but leaving out key details.

The full post is at our new site here.


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