New Cause for Caution on Stocks

Fresh research challenges the historical rate of return on equities. Look to bonds for more balance

A few catchphrases sum up the 1990s: Bill Clinton's "It depends on what the meaning of the word is is," Forrest Gump's "Life is like a box of chocolates"--and Jeremy Siegel's "stocks for the long run." Siegel, 56, a professor at Wharton, turned his catchphrase into the title of a best-selling 1994 book, in which he showed that stocks had trounced bonds and cash over every 30-year period from Thomas Jefferson to William Jefferson Clinton. Siegel's book coincided with--and helped fuel--a long bull market, and America became a buy-and-hold nation. In 1994 stock funds held $853 billion; by 1999 they had...

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