Jeremy Siegel Says Stocks Are Better Than Bonds And It's Not Even Close

Zinger Key Points
  • It'll take you 36 years to double your money in bonds versus 14 years in stocks, Wharton Professor Jeremy Siegel says.
  • "By time you double your money in bonds, you've multiplied your money by five times in stocks," he says.

Wharton Professor of Finance Jeremy Siegel has suggested that bonds are a waste of time — 22 years to be exact

What To Know: Monday morning on CNBC's "Squawk Box," Siegel made the case for stocks over bonds.

"2% after inflation a year takes 36 years to double your money. At a 20 P/E ... that's a 5% earnings yield in stocks, the general S&P 500, that takes 14 years to double your money," the Wharton professor said. 

"By time you double your money in bonds, you've multiplied your money by five times in stocks. So people who tell me, 'oh my goodness, you know, bonds are as good as stocks,' no way for long-run wealth creation."

Check This Out: US Stocks Mixed, Treasury Yields Soar To More Than A Decade High: What's Driving Markets Monday?

He specifically noted that this only works for investors with a long-term time horizon. In two years, anything can happen, he said. But over the long-term, there's no real argument for bonds over stocks.

The returns in bonds would be "well below" stocks, he emphasized. The average inflation-adjusted return in the S&P 500 is closer to 6.5%, so the 5% estimate is conservative, Siegel said. 

If you invested $100 in the S&P 500 10 years ago, you would have generated a return of approximately 264% to date. According to, you would have made approximately 177% on an inflation-adjusted basis over the last 10 years, which works out to approximately 10.2% per year.

See Also: Value Stocks Outshine Growth Amidst Rising Treasury Yields: Key Sectors and Stocks Analyzed

SPY Price Action: The SPDR S&P 500 SPY was up 0.69% at $439.52 at the time of publication, according to Benzinga Pro.

Photo: Nattanan Kanchanaprat from Pixabay.

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