Stocks have a reputation for being volatile
investments. And over the short-term, there is a lot of truth
to this. For example, after accounting for inflation, large-cap
stocks as a group lost almost 39% in 1974 and gained over 30%
the following year, in 1975. In 1990, small-caps lost almost 28%
but gained over 41% in 1991, after inflation. That's a comparatively
broad fluctuation in value for both large-cap and small-cap stocks
over a two-year period.
Compare this to Treasury bills, which —
in a strikingly volatile period for T-bills — lost 1.16%
in 1980 and gained 5.77% in 1981 after accounting for inflation.
Compared to stocks, that's a very narrow fluctuation in value.
In general, stocks have the potential to
change much more sharply in value over the short-term than fixed-income securities, such as bonds and Treasury bills.
Jeremy Siegel, The Wharton School 
