Quotes from Jeremy J. Siegel

By 2060, India's economy is projected to be larger than China's because of its greater population growth. India is forecast to produce about one-quarter of world GDP from 2040 through the rest of this century.

There is no question that the losing IPOs far outnumber the winners. Of the 8,606 firms examined, the returns on 6,796 of these firms, or 79 percent, have subsequently underperformed the returns on a representative small stock index, and almost half the firms have underper-formed by more than 10 percent per year.

I examined the buy-and-hold returns of almost 9,000 IPOs issued between 1968 and 2001. I calculated the returns based on whether investors purchased the IPOs either at the end of the first month of trading or at the IPO offer price and held these stocks until December 31, 2003.25 There is no question that the losing IPOs far outnumber the winners.

The S&P 500 Index originally contained exactly 425 industrial, 25 rail, and 50 utility firms, but these groupings were abandoned in 1988 in order to maintain, as Standard & Poor's claimed, an index that included "500 leading companies in leading industries of the economy.

In 1957, IBM's weight was two-thirds of the technology sector; in 2013, IBM was only the third largest in a sector that contains 70 firms.

In the short run, however, stock returns are very volatile, driven by changes in earnings, interest rates, risk, and uncertainty, as well as psychological factors, such as optimism and pessimism as well as fear and greed.

CVS Corporation, which in 1957 entered the S&P 500 Index as Melville Shoe Corp.,

buy the Consumer Value Store chain in 1969, specializing in personal health products. The chain quickly became the most profitable division of the company, and in 1996 Melville changed its name to CVS.

in 1950 there were 14 retired persons for every 100 workers in the United States. This ratio rose to 28 retirees per 100 workers in 2013, and by 2060 it is expected to rise to 56.

As we explore later in this chapter, virtually no asset, except for long-term U.S. Treasury bonds, served as an effective hedge against the sudden and sharp decline in asset values that took place during the financial crisis.

At the end of 2012, the yield on nominal bonds was about 2 percent. The only way that bonds could generate a 7.8 percent real return is if the consumer price index fell by nearly 6 percent per year over the next 30 years. Yet a deflation of this magnitude has never been sustained by any country in world history.

China will be the world's largest economy when its per capita income reaches 25 percent of that of the United States, which is forecast to occur around 2016.

the economy of China will become twice the size of the U.S. economy in 2025 if both countries' per capita income continues to grow at recent rates.

Africa remains a small part of the world economy until 2070, when it begins to expand rapidly, reaching 14 percent, the same size as the economy of China, by the end of the century.

In 2006 the United Nations Human Development Report estimated that 2.6 billion people, or 40 percent of the world's population, had no indoor plumbing.

The amount of $1 invested in a capitalization-weighted portfolio in 1802, with reinvested dividends, would have accumulated to almost $13.5 million by the end of 2012.

would take only $1.33 million invested in the stock market in 1802 to grow, with dividends reinvested, to about $18 trillion, the total value of U.S. stocks, by the end of 2012. The sum of $1.33 million in 1802 is equivalent to roughly $25 million in today's purchasing power, an amount far less than the value of the stock market at that time.

By the end of 2012, the price of gold reached $1,675 per ounce, and $1 of gold bullion purchased in 1802 was worth $86.40 at the end of 2012, while the price level itself increased by a factor of 19.12.

The first actively traded U.S. stocks, floated in 1791, were issued by two banks: the Bank of New York and the Bank of the United States.

It is interesting that an investor who has some knowledge of the principles of equity valuations often performs worse than someone with no knowledge who decides to index his portfolio.

A 6.5 percent annual real return, which includes reinvested dividends, will nearly double the purchasing power of your stock portfolio every decade. If inflation stays within the 2 to 3 percent range, nominal stock returns will be 9 percent per year, which doubles the money value of your stock portfolio every eight years. Despite

Chapter 6 showed that over holding periods of 20 years or longer, stocks have both a higher return and lower after-inflation risk than bonds. The

There is a good reason why stocks are not reacting to Fed policy as they have in the past. Investors have become so geared to watching and anticipating Fed policy that the effect of its tightening and easing is already discounted in the market. If investors expect the Fed to stabilize the economy, this will be built into stock prices long before the Fed even begins to take its stabilizing actions.

Tilt your portfolio toward value by buying passive indexed portfolios of value stocks or, fundamentally weighted index funds. Chapter