— Broyhill 2018 annual letter
— Warren Buffett
If you had to choose between buying long-term bonds or equities, I would choose equities in a minute. If I were going to own a 30-year government bond or own equities for 30 years, I think equities will considerably outperform that 30-year bond.
I want to quickly acknowledge that in any upcoming day, week or even year, stocks will be riskier – far riskier – than short-term U.S. bonds. As an investor’s investment horizon lengthens, however, a diversified portfolio of U.S. equities becomes progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates. It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals – to measure their investment ‘risk’ by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk”— Warren Buffett