Comment by haidut

OK, I have a (probably stupid) question. If the 3-month T-bond rate is say 2.32%, does that mean that I can buy such a 3-month security 4 times in a row in a given year to get a total of 4 * 2.32 = 9.28% ROI on the money I am using to invest? Actually, the return would technically be higher than since the second, third and fourth times I am buying the T-bond I will use not only the original cash I had on hand but also the 2.32% return I received each time I bought the T-bond. So, assuming everything is re-invested in the 3-month T-bond the total ROI for a given year would be about 9.6% (assuming the rates stay the same of course). A ROI of 9.6% is quite good and beats stock market return over most years, while also being virtually risk-free. Am I missing something here? Why invest in a (risky) stock market unless you can reasonably expect a return in the double digits that can compensate for the extra risk, compared to a 9.6% risk-free ROI from T-bonds? Please pardon my ignorance and thanks in advance.