Jeremy J. Siegel

Bio: Jeremy J. Siegel is an academic researcher. The author has contributed to research in topics: Liberian dollar & Financial market. The author has an hindex of 1, co-authored 1 publications receiving 2 citations.

Earnings, Inflation, and Future Stock and Bond Returns 1

Abstract: Thank you very much. I am honored to follow one of my heroes in the investment industry, Jack Bogle, founder of the Vanguard Group. I think I was among the first to own Vanguard's money market fund back in the 1970s and the path-breaking S&P 500 Index Trust. Both funds were important breakthroughs. I remember my mentor, Professor Paul Samuelson of the Massachusetts Institute of Technology, crying out for the creation of a stock index fund while I was a graduate student there in the late 1960s.Before I start my presentation, I want to note that I found it disturbing that the ninth-best performing stock the day following President Obama's re-election, which saw the Dow plunge by more than 330 points, was Smith and Wesson, the largest firearms manufacturer in the United States. Let me mention that I'm nowhere near that pessimistic and have a much more optimistic view of the equity market than either Jack Bogle or any of those investors driven to buy guns.Long-Series Historical ReturnsIt is very important to develop long historical time series to gain understanding of the historical returns in financial markets. The American Philosophical Society will soon celebrate its 270th birthday. It is one of the few institutions that go back further than the 210-year time series I have developed. No other researcher has compiled a longer return series on major classes of financial assets-stocks, bonds, treasury bills, gold, and the dollar.Figure 1 shows how wealth accumulates by investing in these assets over the past two centuries.These accumulations, which are measured after inflation, assume that all cash flows from the assets, such as dividends and interest, are reinvested back in the asset class. A single dollar invested in stocks in 1802 grows to more than $669,000 after inflation by 30 June 2012, whereas a dollar in Treasury bonds grows to $1,633 and a dollar in Treasury bills to only $284.With gold prices soaring today, investors often ask, "Dr. Siegel, where does gold fit in a long-term portfolio?" Well, if your great-greatgreat-grandfather back in 1802 bought a little nugget of gold that cost him $1.00 and put it in a vault to be opened 210 years later by his great-great-great-granddaughter, the price after inflation of that nugget of gold would have soared all the way to $4.35, representing a gain of less than 1% per year. Nevertheless, gold does much better than the U.S. dollar, which has declined almost 95% in purchasing power over the last 210 years, almost all of it coming since World War II.But what I find most remarkable in Figure 1 is the accumulation in stocks. All these returns are plotted on a logarithmic scale, which means that a straight line represents a constant after-inflation rate of return. It is apparent that there is no other asset class that, in the long run, has a more stable return than equities, although in the short run, stocks are the most volatile. All these little wiggles that are apparent in the growth of stock wealth are those widely publicized bull markets and bear markets that so frighten investors. But when you view these fluctuations in a long-run context, they look like mere blips in the long-term upward thrust of stock returns.Indeed, the most important conclusions of Stocks for the Long Run is that stocks are the most volatile asset class in the short run, but the most stable asset class in the long run. Figure 1 also indicates that an investor should particularly want to be in stocks when stock returns are at or below their long-term trend line. But you need to be wary of stocks when total returns are far above the trend line, such as in March 2000, at the top of the technology and Internet bubble. From that top, stock returns have been only about 2.5% per year, just barely above the rate of inflation. It is not surprising that stock returns have not been good since valuations were also at record levels in 2000. In contrast to the peak in March 2000, stocks fell in March 2009 well below their trend line, signaling excellent returns going forward. …

Building Industry Reporting and Design for Sustainability (BIRDS) Commercial Database Technical Manual: Update

Abstract: .............................................................................................................................................................. I PREFACE ............................................................................................................................................................... III ACKNOWLEDGEMENTS .......................................................................................................................................... V AUTHOR INFORMATION ........................................................................................................................................ V LIST OF ACRONYMS ............................................................................................................................................. XV

Present Value of Photovoltaics – [PV]2 – User Guide

Abstract: