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“Long-Horizon Investing, Part 3: The Riskiness of ‘Low-Risk’ Assets” on Advisor Perspectives

In investing, you can have safe present value OR safe future value, but not both!
 
Part 3 of my Advisor Perspectives series on long-horizon investing shows why long-term Treasury bonds (or better yet, TIPS)–which the last couple years clearly prove are quite risky on a short-term basis–are in fact the risk-free asset for a long-term goal. Less intuitively, cash and short-term bonds, which are very safe on a short-term basis, are just as risky with respect to a long-term goal. This is true even though they never lose value on a present-dollar basis.
 
A mountain climber and a mystical financial guru illustrate “The Riskiness of ‘Low Risk’ Assets.”

https://www.advisorperspectives.com/articles/2023/10/09/horizon-investing-riskiness-low-risk-assets-nathan-dutzmann

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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