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| | After the Fall --October 22, 2002 |
 | | After these costs are taken into accountall of the management fees, the transaction costs, the distribution costs, the marketing costs, the operating costs, and the hidden costs of financial intermediationthe returns of investors mustand willfall short of the market return by an amount precisely equal to the aggregate amount of those costs. |
 | | And now, after the fall, equity fund investors are liquidating their holdings, month after month. |
 | | After all, if the risk-free Treasury bill rate drops from, say 5% to 3% over a decade, it would seem logical that the earnings yield on stocks (the reciprocal of the p/e ratio) might drop from, say 8% to 6%, leaving the equity risk premium at 3%. |
| www.vanguard.com /bogle_site/sp20021022.html (6332 words) |
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