This seems to be a rather inefficient method of calculating an average return :-/ I’m not being quite fair here because doing it this way accounts for things like higher moments and so is better, but still...
The underlying assumption is that both the stock market (represented by different proxies at different points in time!) and the bond market (ditto) are stable unchanging processes since 1926. That, um, does not look likely to me.
This seems to be a rather inefficient method of calculating an average return :-/ I’m not being quite fair here because doing it this way accounts for things like higher moments and so is better, but still...
The underlying assumption is that both the stock market (represented by different proxies at different points in time!) and the bond market (ditto) are stable unchanging processes since 1926. That, um, does not look likely to me.