There are countless thousands of investing books out there, but precious few that could be considered true classics.
Some of the obvious titles include Benjamin Graham's "The Intelligent Investor," of course, one of the bibles of value investing and a favorite of gurus like BerkshireHathaway's Warren Buffett. Maybe books like Burton Malkiel's "A Random Walk Down Wall Street," or "Beating the Street" by former Fidelity Magellan manager Peter Lynch should also be included on the syllabus.
But no such list would ever be complete without "Stocks for the Long Run," byJeremy Siegel, a finance professor at the Wharton School of the University of Pennsylvania.
Hard to believe, but 20 years have passed since that classic's first publication back in 1994. Now there is a new edition of the book, analyzing the 2008 financial crisis that shook investors to their core, and providing fresh forecasts for the years ahead.
Reuters sat down with Siegel to chat about the wild ride of the last two decades - and about what twists and turns are still in store.
Q: Twenty years have passed since you published your book, but long-term stock returns have remained the same. Do you see those findings as a validation of your earlier work?
A: Stock returns through 2013 have averaged 6.7 percent per year, which is exactly the same as I reported in the first edition of "Stocks for the Long Run" back in 1994. Of course there has been quite a bit of volatility over the past couple of decades.
And over the short run, equities are indeed a very volatile asset class. But over the long run, perhaps the most stable asset class of all, delivering the highest returns.
Q: You are not quite as hopeful for bondholders, though.
A: They have had some great years, but right now it looks to me like the environment of the early 1960s. I don't think we will end up with inflation rates like we had in the 1970s, which got up into the double digits, but I do think 10-year interest rates on bonds will get to 4 or 5 percent. Not this year, maybe, but in 2015 or 2016. And that obviously does mean a tougher time for bondholders ahead.