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What Stock Risks

By Dian Vujovich

If only I had a crystal ball and knew when the market was going to recover and start zig-zagging upward I would have purchased 10,000 shares of Citicorp (C) for a buck the other day. But I didn’t because I’m both a little bit of a chicken and, like I said, I don’t have a crystal ball.

In either event, I’d be richer today had I gone for it.

I don’t mind taking risks in life. Seems as though one doesn’t get very far if they don’t. But risks taken in one’s personal life and those taken in marketplace are horses of two different colors as those in the markets have been charted and graphed for decades.

Earlier this month at Yahoo.com in a Barron’s Online story by Gene Epstein titled, “Case Closed: Stocks Work” I read what I’d learned as a stockbroker decades ago: After 20 year’s there is basically no risk to stock investing.

From the piece: “The historical record shows that for 20- and 30- year periods, inflation-adjusted returns on stocks have never been negative. Over the 137 years from 1871 through 2008, returns after inflation for 20- and 30-year intervals have been consistently positive. Median returns over the 20-year intervals have been 6.85%, and for 30-year intervals, 6.23%.

That’s great news for newborns and those just beginning their savings and investing careers. For those over 50, however, that news may not be so exciting.

As far as bonds go, stocks still outperform them over 30-year intervals.

Read the story. It’s full of good info and the link is:

Oh. And don’t forget that while the historical numbers are one thing, they don’t come with the guarantee that the stocks you pick will be winners, or even around, 20 or 30 years from now. There’s always a catch, isn’t there?

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