That's the simple reason why stocks return more than bonds. The investor in stocks is assuming more risk. When I'm investing in a bond, I'm investing in a contract with the issuer. And if it's a good quality issuer or the corporation is promising to pay me a certain amount every year, and at the end of the period, I get my money back. That's a contract.
Common stock is nothing like that.
There's no contract, there's no guarantee, and as a result, there's a higher risk. So, you should have a higher return on stocks than you do on bonds. Over the past year or two there's been this thesis out there that stocks are actually less risky than bonds because if you hold them for a long period of time they outperform bonds. Well, you just have to get back to the basics. A bond is a contract.