How to Money · Wednesday, July 15, 2026
Paul Merriman presented a stark comparison between the long-term returns of bonds and stocks, citing that bonds have historically returned about 5% less than the S&P 500. He calculated that this difference translates to a potential loss of ten million dollars over a lifetime for investors who opt for bonds over stocks, emphasizing that understanding and tolerating stock market volatility is crucial for long-term wealth accumulation.
“Well, I mentioned that a half of percent equals over a million the difference in the return of bonds over the last ninety five years. I'm talking intermediate maturities and the return of the stock market the S and P five hundred five percent for bonds, ten percent for the S and P five hundred, That is five percent. That is ten one half of percent. That means it is legitimately a ten million dollar decision to go to where you think the safety is.”
“And yet if you look at the average return of the S and P five hundred for all the forty year periods, the average is eleven percent. If you looked at the best, it was twelve and a half. If you looked at the worst it was eight point nine. So anybody who thinks that they're going to go into bonds and that's going to be the safe place to be, you are based on all history leaving a bonanza on the table.”