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Why Stock-price Volatility Should Never Be a Surprise, Even in the Long Run
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Why Stock-price Volatility Should Never Be a Surprise, Even in the Long Run

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Stock market investors have suffered deep losses in the past 18 months, challenging the belief that stocks are the best long-term investments. Indeed, Wharton finance and economics professor Robert Stambaugh recently coauthored a paper titled, “ Are Stocks Really Less Volatile in the Long Run? ,” which suggests that equities are subject to bigger price swings than previously understood. The research adds a new perspective to the work of Wharton finance professor Jeremy J. Siegel , author of the book, Stocks for the Long Run , which says stock returns more than offset risks if you stay with the market through its ups and downs. In a recent interview with Knowledge at Wharton, the professors described their views about the market’s long-term behavior. An edited transcript follows. Knowledge at Wharton : Professor Stambaugh, your work finds that volatility in stocks — the ranges of ups and downs — can be considerably more severe than most people believe .…

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