The stock market crash - and after

Bibliographic data

Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIII. Flight from Bonds to Stocks

Collection:: Economics Books

Flight From Bonds to Stocks 201 favor of stocks, so far as this item of income is con cerned. But if we count the increase in the capital value of the securities, the advantage was reversed, making a net advantage for bonds of $1,012. This period was, as is well known, a period of rap- idly falling prices, so that the bondholder, so far as the element of change in the dollar is concerned, was benefited thereby. On the other hand, during periods of rising prices, such as 1901-1922, the stockholder had a very de- cided advantage. Test 1, for instance, showed that as between $10,000 invested in 1901 in stocks and $10,000 invested at the same time in bonds, there was a net advantage in favor of the stockholder, of principal and income together, of $10,981. In all these comparisons the advantages are reck- oned in the actual dollars received, a reckoning which is imperfect, first, because of the variability of the dollar, and second, because of the unequal distribu- tion in time of the returns from stocks and bonds. Evidently the fairest comparison is to be made by computing the rate of yield in the various invest- ments, in the sense that this phrase is used in the ordinary bond tables. In this way we find the real yield as distinct from the nominal yield. The distinc- tion is somewhat analogous to that between real and nominal wages. The rate of yield on any invest- ment is that rate of interest, which, if used for dis- counting the income and principal to be received, would give an aggregate discounted value at the time of purchase, equal to the purchase price. Thus the

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