Many accepted financial rules are not timeless. Stocks only began consistently outperforming bonds after WWII, and inflation-adjusted US home prices were flat for a century before 1997. This reveals that much financial advice is based on recent history, not immutable laws, making it a poor guide for the future.

A controversial academic study using data from 1890 found the optimal retirement portfolio is 100% in stocks (one-third domestic, two-thirds international). This challenges the conventional wisdom of shifting to "safer" bonds, which perform poorly during high inflation.

Contrary to standard finance theory, historical data across many countries shows no consistent equity risk premium. Stock and bond returns are driven by independent factors, meaning investors should analyze their potential returns separately rather than assuming stocks will automatically outperform bonds by a set margin.

The stock market has fundamentally transformed. From the nation's founding until the 1980s, it was a dividend-generating vehicle, with income comprising 96% of total returns. Since then, it has become almost purely an instrument for price appreciation, a completely different function.

Contrary to their "safe haven" reputation, U.S. bonds experienced a prolonged period of poor performance. From the early 1910s to 1981, rising inflation and interest rates meant bondholders lost purchasing power, challenging the assumption of bonds as a stable, long-term store of value.

The historical outperformance of stocks has a standard error so large (2.1% on a 5.4% premium) that the true premium could be anywhere from 1% to 9%. This statistical uncertainty makes history an unreliable guide for future returns.

The entire modern financial system was built on the historically anomalous assumption of a negative correlation between stocks and bonds. The market is now reverting to its historical norm of positive correlation, invalidating traditional portfolio construction like 60/40.

Today's entire financial advice landscape—from 'stocks for the long run' to FIRE and gold buggery—was born in the 1910s. It emerged as a desperate response to two problems that were brand new to Americans: persistent inflation and the income tax.

The perception of government bonds as 'safe' is challenged by history. In the 35 years following WWII (1945-1980), a period of inflation and financial repression, investors in most global government bond markets saw the real value of their capital decimated.