Rethinking the Risk of Stocks

The mainstream investing media may finally be getting it. A recent “Ask the Expert” article from Money Magazine tells us that we should “rethink” the risks of investing in stocks.

Well, duh!

What is significant about this particular article is that it cites actual research to support the author’s premise:

After a 75% surge from a little more than a year ago, stocks have plunged 12% from the beginning of May through yesterday’s close.

Unfortunately, recent research from Morningstar and Ibbotson Associates suggests that stocks are more prone to these sorts of convulsions than you may realize.

In the article, the author recommends that prospective retirees “get guaranteed income.” That’s what I’ve been preaching here, for a year. The author suggests annuities. But what about inflation?

I think we will see more of this attitude adjustment toward equity investing in the coming months. Who knows – Zvi Bodie might become mainstream!