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“Long-Horizon Investing, Part 2: Stocks are Always Risky” on Advisor Perspectives

“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.

DISCLOSURES: All content is provided solely for informational purposes and should not be considered an offer, or a solicitation of an offer, to buy or sell any particular security, product, or service. Round Table Investment Strategies (Round Table) does not offer specific investment recommendations in this presentation. This article should not be considered a comprehensive review or analysis of the topics discussed in the article. Investing involves risks, including possible loss of principal. Despite efforts to be accurate and current, this article may contain out-of-date information; Round Table will not be under an obligation to advise of any subsequent changes related to the topics discussed in this article. Round Table is not an attorney or accountant and does not provide legal, tax or accounting advice. This article is impersonal and does not take into account individual circumstances. An individual should not make personal financial or investment decisions based solely upon this article. This article is not a substitute for or the same as a consultation with an investment adviser in a one-on-one context whereby all the facts of the individual’s situation can be considered in their entirety and the investment adviser can provide individualized investment advice or a customized financial plan.

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