2) This is what gives Lynch is in line with what is given independently of it, John Ritchie in his "Study of Religion" (Warsaw 1997). On pages 9-10, he presented a very detailed account of the annual rates of return for government bonds, corporate bonds, treasury bills and the ordinary shares in the years 1926-1993. After averaging the results of rates of return for the whole period we have:
Corporate Bonds - 5.90%
Government Bonds - 5.36%
Treasury Bills - 3.74%
Ordinary shares - 12.34%
Throughout this period, shares gave twice the annual rate of return. The same was true after 1990 and 1993 (see Appendix at the end), or after the dates on which ends its calculations Lynch and Ritchie.
3) Jeremy Siegel in his book "Stocks for the Long Run" goes even further than Lynch and Ritchie, and compares the rate of return for stocks and bonds in the period from 1871 up to 2008. Its a very comprehensive comparison shows that throughout this period, shares gave a higher rate of return per annum by 3.2% than bonds. After deducting the inflation rate of return on shares in that period was equal to 6.2%, 3.2% on the bonds. Siegel estimates that over 30 years the purchasing power of the equity portfolio was 150% higher than the bonds in the 40-year period up to 3-fold higher. The model takes into account the arithmetic rate of return instead of a compound annual rate of return advantage over the bond share of 4.6% for the period indicated.
4) Siegel notes that in the period from December 1925 to January 1981, ie up by 55 years, the total rate of return on bonds was negative. Meanwhile, never been a very long period in which the rate of return on shares would also be negative. Even in one of the worst 30-year period for the shares of the rate of return was 2.6% above zero (slightly below the average rate of return on bonds), but it was not negative.
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