Biography
Edward F. McQuarrie, Ph.D., is Professor Emeritus at the Leavey School of Business at Santa Clara University. After retiring from Santa Clara in 2016, he pursued new research interests in financial market history and retirement income planning. Projects under way include errors of estimate in historical index returns, the fitful nature of size and value effects, fluctuations in the corporate bond premium, the annuity wager, and payoff analyses for Roth conversions. Working papers describing his research in progress can be downloaded at https://ssrn.com/author=340720. For more information, visit his website at edwardfmcquarrie.com. He posts regularly at bogleheads.org and occasionally at medium.com.
Stocks are a good wager over the long term, on favorable odds. But stocks remain a bet, and investors must grasp how much returns can vary over long time horizons.
Sometimes, regardless of the holding period, stocks do underperform in absolute terms or relative to bonds.