(2) Chapter 2, like the rest of the book, was written in 2007 based on market data through 2006. The book was published in late 2008, with no opportunity to update the market data for 2007.

All of the Figures in Chapter 2 (Figures 2-1 through 2-5) have now been updated based on market data through 2008, and they are shown below. Under each Figure, I provide a commentary which compares the Figures based on 2006 market data with the Figures based on 2008 market data.

		Figure 2-1
Returns and Risks for Bonds and Stocks
		1926-2009 (%)
---------------------------------------------------------------------------------
		Compound		One-Year
		Annual		Return Range
		Return	2/3 of the Time
		---------------		---------------------
Bonds		5.3		-4 to +15
Stocks		9.8		-11 to +30

These data are almost exactly the same as those in the book, which is not surprising given the extremely long period involved. The comments about Figure  2-1 in the book are still applicable.

	Figure 2-2
Rolling 5-Year Data
	1930-2009 (%)
---------------------------------------------------------------------------------
				Five-Year
		Median		Return Range
		Return		2/3 of the Time
		---------------		---------------------
Bonds		5.5		+1 to +10
Stocks		10.2		+2 to +19

These data are also almost exactly the same as those in the book, which is not surprising given the extremely long period involved. The comments about Figure   2-2 in the book are still applicable.

	Figure 2-3
Compound Annual Returns by Decade (%)
	1920-2009
----------------------------------------------------------------------
Decade		Bonds		Stocks
---------------		------------		-----------------
1920-1929		5.0		19.2
1930-1939		4.9		-0.1
1940-1949		3.2		9.2
1950-1959		-0.1		19.4
1960-1969		1.4		7.8
1970-1979		5.5		5.9
1980-1989		12.6		17.5
1990-1999		8.8		18.2
2000-2009		6.2		-1.0

All the data before 2000 are the same as they are in the book. Because of the significant decline in the stock market from 2007-2009, the performance for stocks for this decade has declined from 1.1% in the book (through 2006) to -1.0% (through 2009). As you can see, the performance for this decade is the worst of any decade in history. It is important to note, however, that this worst decade had a compound return which was only a negative 1.0%. Furthermore, this decade had two significant equity market declines, which is historically unusual.

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