Open AccessThe Desirability Index: A Measure For The Desirability Of Stocks Over Bonds Over The Long Term
Author(s) -
Yash Pal Joshi
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v10i1.5964
Subject(s) - bond , index (typography) , economics , measure (data warehouse) , cutoff , horizon , term (time) , econometrics , financial economics , actuarial science , mathematics , finance , computer science , database , physics , geometry , quantum mechanics , world wide web
One of the long held beliefs in the field of investments is that stocks are more desirable as compared to bonds for long horizon portfolios. But how long is the long horizon? This paper defines two summary measuresthe Desirability Index and the Cutoff Horizonto measure the desirability of stocks over bonds, and concludes that, based on historical performance, stocks are more desirable than bonds for horizons longer than 15 years.