“Okay, so maybe the theory says stocks can’t be riskless in the long run, but doesn’t the evidence say they are anyway?”
Part 2 of my five part series “Long-Horizon Investing” on Advisor Perspectives takes a tour of the theoretical reasons why stocks must be risky at all horizons, followed by a quantitative analysis of the problems with drawing conclusions from sparse independent long-horizon data.
Stay tuned for parts 3-5, where we’ll identify what is and isn’t a long-horizon safe asset and propose a goals-based framework for building a risk-aware combination of safety and growth in retirement-oriented investing.
Finally, special thanks to Joe Tomlinson and Michael Finke for their helpful comments on this article series. The final product is much better for their input.
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