Investors have too often extrapolated from recent experience. In the 1950s, who but the most rampant optimist would have dreamt that over the next fifty years the real return on equities would be 9% per year? Yet this is what happened in the U.S. stock market. The optimists triumphed. However,...

The paper focuses on the impact of time horizon on risk and return, which usually is the object of discussions about “stock versus bond”. The aim of this paper is to investigate the transformation of risk and return when increasing the investment term, and to determine the impact of the...