It has long been a mystery among academics why stocks have done so much better than bonds throughout U.S. history. Not everyone agrees with them. Jeremy Siegel, a professor at Wharton and an authority on financial history, thinks that stocks have done well because savers have been too foolish to want them. If he's right, and if you have no such fears, you can improve your lot by dumping your Treasurys and buying stocks. He denies that investor jitters reflect a rational fear that what happened to foreign exchanges might one day happen to ours.
Bonds are equally vulnerable to political disaster.
My hunch is that if you were able to eradicate all of that bias, you would remove part of the demonstrated superiority of equities in the last 150 years over alternative investments, such as bonds, money market funds and bank accounts. It makes me cringe. He thinks stocks always have been, and always will be, much better than bonds in long-term performance. What sets Ibbotson apart is the passion with which he preaches the equities gospel. By year-end 2001 the Dow Jones industrial average will hit the magic 10,000.