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.”
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