Overview of Stock and Bond Returns

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Section 1 introduces the core premise of Exponential Wealth: Long-term wealth is created through total return, reinvestment, compounding, and time. It explains why stock and bond returns must be measured as total returns, including dividends, coupons, capital gains, and losses, not as price changes alone.

The section also explains why investors often fail to capture market returns. Inflation, taxes, fees, poor timing, insufficient savings, and behavior can reduce realized outcomes. By linking the Stocks, Bonds, Bills, and Inflation (SBBI) legacy to the new Ibbotson Equity and Bond Indices, Section 1 establishes the foundation for the book’s historical evidence and future return analysis. In short, Section 1 of Exponential Wealth: Centuries of Stock and Bond Returnsteaches readers how to read the rest of the book — not as a celebration of past returns but as a disciplined framework for understanding how wealth is created, measured, and sometimes lost.

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