Here’s a quick 7 minute video produced by Dimensional Fund Advisors on the REAL risks of treasury bills vs. the risk for equity investment. It’s a piece every investor should see and understand, as the risks to purchasing power are increased dramatically with a heavy allocation to (what people mostly consider) “safe” investments like treasury bonds.
Here’s the video:
http://www.dfaus.com/library/videos/retireme/
Surprisingly enough – the WORST 10 year period for stocks is NOT AS BAD as the WORST 10 year period for stocks and a balanced portfolio somewhere in the middle has the best risk/reward characteristics!
OF COURSE, the main caveat is we’re assuming “equities” or “stocks” are a DIVERSIFIED BASKET of those securities – NOT individual stock positions, which brings in another realm of portfolio risk.
Greg
Tags: bonds, equity performance, financial retirement planning, stocks, treasury bond performance
