"Are There Risks of Being Too Conservative?"
I have to admit that I feel a little bit like I am attacking motherhood and apple pie in this article, so let me stipulate up front that I do not believe that any investor should take risks beyond their comfort zone, nor do I think that anyone really has a leg up on being able to predict the direction of the stock market… in the short run at least. In the long run, however, I can predict the stock market direction with great confidence … (cue the drum roll, please) … in the long run, the stock market will be … UP. I can state that because the economy of the United States has been an amazing juggernaut, overcoming every obstacle and impediment in its path … wars, near wars, political upheavals, assassinations, and all kinds of government mischief in the disguise of various taxes and regulations. And in the face of all that, the U.S. stock markets have managed, ON AVERAGE, to gain about 10% per year throughout the 20th century, while bonds and more secure investments tend to average 3-...