Talking About Risk
from the risk-takers-in-history dept
I found it pretty interesting that what most of us may view as safe options for investments, bonds may not be as safe or as good an investment. An interesting historical study done on returns from stocks and bonds revealed that the overall return of stocks outweighed the measly returns of bonds. Putting it in another way, stocks over all seemed just as risky as bonds but the plus point was that they also took part in the potential upside (which bonds didn?t). Seems to me like good insight for the new economy.
Comments on “Talking About Risk”
No Subject Given
nice view on “risk.” what’s important to remember is that bonds are also used for capital preservation and income strategy, as you expect to get your principal+interest payments on a regular basis, not at the end of the term. maybe what’s more important to note is that some people cannot deal with the volatility of say, a MSFT stock and would rather deal with its corporate bond because the chances of default are very slim, whereas for a long time you might have to deal with a dip in stock price (like it’s doing today) regardless. i don’t play around with bonds anyway.
Re: No Subject Given
I guess most people prefer packaged risk, even though the smart money’s usually on the oppisite.