Post #8418 by Mark on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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I would expect the odds of T-bills beating the S&P in the next 5 years to be a little greater than even.

Maybe. But historically it VERY rarely happens.

Let's say T-bills are 5%, 4.5%, 4%, 3.5%, and 3.5% for the 5 years (and that's being very generous because there is likely to be a recession at some point and they will be lower), so roughly a cumulative 20% or so. How often has the S&P500 5-year return been below 20%? Not very often. Furthermore, if the S&P500 will have a dismal 5-year period, it is almost surely associated with a concurrent recession, probably a deep recession, and that means T-bill rates during the period would be far lower than my generous allocation above. So, even if the chance of T-bills outpacing S&P500 over a 5-year period actually occurs, it isn't likely to outpace it by much anyway.

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