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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: mungofitch ✹🐝🐝🐝🐝 SILVER
SHREWD   😊 😞
Number: of 15056 
Subject: Re: OT: S&P versus T-Bills?
Date: 07/18/2024 10:11 AM
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Over the next 5 years will the S&P 500 with an earnings yield of 3.5% outperform 3-month T-Bills with a yield-to-maturity of 5.4%? How about BRK-B?
...
Well, there's no way to know for sure. First of all, the 13-week T-bill is 5.337% now, but will be lower later this year, and even lower next year, and likely lower for the next few years. It is very likely that the S&P500 and Berkshire will outperform T-bills over 5 years.

As you say, there's no way to know. But FWIW I would expect the odds of T-bills beating the S&P in the next 5 years to be a little greater than even. It's hard to make money with a low conviction expectation like that, though. The markets can do anything, for a while.

If it's a five year outlook, one might do better buying 5-year TIPS today rather than rolling T-bills. Current yield inflation + 1.89%. I think the return might be higher, and it has the advantage of avoiding taking a gamble on the resurgence of inflation.

Jim
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