Roger Ibbotson Receives Graham and Dodd Scroll Award

New Haven, Conn.-April 15, 2004- Roger G. Ibbotson, Professor in the Practice of Finance at the Yale School of Management, is a recipient of the 2003 Graham and Dodd Award for his paper "Long-Run Stock Returns: Participating in the Real Economy" with Peng Chen, Managing Director and Director of Research of Ibbotson Associates.

The Graham and Dodd Scroll Award is bestowed by the Association for Investment and Management Research (AIMR) and its publication, the Financial Analysts Journal. It was established in 1960 to recognize excellence in financial writing. The award is named in honor of Benjamin Graham and David L. Dodd for their contributions to the field of financial analysis.

"Long-Run Stock Returns" was first published in the January/February 2003 issue of the Financial Analysts Journal. The paper estimates forward-looking, long-term equity risk premium by extrapolating the way it has participated in the real economy. Contrary to several recent studies that estimate the forward-looking premium to be close to zero or negative, Ibbotson and Chen's method found it to be only slightly lower than the straight historical estimate. This finding has implications for investors.

"The implication of an estimated equity risk premium being far closer to the historical premium than zero or negative is that stocks are expected to outperform bonds over the long run," write the authors. "For long-term investors, such as pension funds and individuals saving for retirement, stocks should continue to be a favored asset class in a diversified portfolio. Because our estimate of the equity risk premium is lower than historical performance, however, some investors should lower their equity allocations and/or increase their savings rate to meet future liabilities."

This is the fifth Graham and Dodd Scroll Award for Professor Ibbotson. He also received the award in 1979, 1982, 1984, and 2001.