EXHIBIT 1 STOCKS VERSUS BONDS VERSUS 60/40 Wealth 800.00 700.00 600.00 500.00 400.00 300.00 200.00 100.00 0.00 92/21 8/31 4/37 72121 B ISA 12/59 STOCKS BONDS 60/40 EXHIBIT 2 Portfolio Statistics 1926-1993 (%) Portfolio 100% Stocks 100% Bonds 60% Stocks, 40% Bonds Compound Return 10.3 5.6 8.9 Why would anyone hold Bonds for the long run if Stocks outperform them by so much? Who cares if the 60/40 portfolio has a higher Sharpe Ratio than then the 100% stocks, if it gets such lower returns? Standard Deviation 20.0 6.8 12.9