We need to get one last bit of housekeeping out of the way.
Markets displayed in Figures 1-9 to 1-14 are summarized in Table 1-1.
These are the markets with the shortest histories, and are exclusively what we would today call "emerging markets." Although there is a fair amount of scatter, note how in general, european discount airlines the countries clustering on the left half of the graph have lower returns than the.
And, yet, both the logic of the markets and history show us that when the sun shines the brightest, investment returns are the lowest.Return is by far the easiest half, because it is simple to define and calculate, either as "total returns"the end values in Figures 1-7 and 1-8, or as "annualized returns"the hypothetical gain youd have to earn each year to reach that value.The monetary shocks of the twentieth century are among the most severe in recorded economic history, and it is more likely that inflation-adjusted bond returns going forward will be closer to the 3-4 rate of the previous centuries than to the near zero rate.Retirement planning is an enormously complicated topic, which well explore in Chapter Twelve in some detail.Linda Anusasananan, san Mateo, CA, linda is a freelance food writer and recipe developer, and a panelist for the San Francisco Chronicle's Taster's Choice column.The key word here is expected, as opposed to guaranteed.Was an emerging market, and two centuries ago, England, France, and Holland were too.Its now time to focus on the precise nature of bond and debt risk and its behavior over the ages.Because of the instabilities of international bullion flows resulting from postwar inflation, the gold-standard world, which had existed since the Lydians first coinage, disappeared forever in the two decades after the Great War.But even allowing for this, Figure 1-1 is still highly deceptive.But even in the modern world, where there is return, there also lurks risk.The "size" of a company can be measured many ways the number of its employees, or the amount of sales, profits, or physical assets it owns.
But do not lament todays paper-based currency, because the gold-based economic system, which Keynes called a "barbarous relic was far worse.