Topic: How To Invest

What is Pat’s commentary for the week of March 14, 2017

Article Excerpt

Dear Inner Circle member, On occasion a client asks, “Should I invest in stocks in retirement?” The answer to the question depends on two sets of info: First, start with the essential differences between stocks and bonds. Over long periods, bonds tend to provide lower but more certain returns than stocks. Most bonds come with fixed interest rates and maturity dates. The value of a bond varies during its life, but at any given time, you know what the maximum return will be if you hold it to maturity. Stocks provide higher returns than bonds, but those returns vary more widely, both from year to year and from stock to stock. Economic theory justifies that higher return. Stocks are subject to more volatility and risk, so they have to provide a higher long-term return. Otherwise, nobody would buy them. Stocks also tend to provide something of a hedge against inflation, while bonds are totally at the mercy of inflation. Today, investors seem to disregard this feature…

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