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It’s a question I hear all the time: which do you recommend – investing in bonds vs. stocks?

If you’re familiar with the ValueAligned® Partners’ method, you already know the answer.

If not, keep reading.

Both have risks and rewards. But if you want to maximize your retirement income, no matter if you’re planning to stop working in five or 25 years, to make sure you will always have enough income from your investments, the answer is undoubtedly to invest in stocks.

Bond Projections for 2016

In the investing in bonds vs stocks argument, I’ve already given my two – well, three cents on myths surrounding bonds. But let me bring you up to speed.

While bonds offer a “guaranteed” return on your investment, inflation could greatly alter your security’s value. If you have a 10-year bond that yields $1,000, that $1,000 probably won’t hold the same value once it’s in your pocket.

Just looking 10 years ago, today’s one grand certainly can’t buy you what it could then. $1K 10 years ago can buy you about what $1,200 can today.

You have to stay ahead of inflation.

Thinking about a U.S. Treasury Bond? As of December 23, 10-year Treasury interest rates were less than 2.3 percent. So to earn $1,000 in each of the next 10 years, you’ll have to invest $44,000. And then after 10 years you will get back the $44,000. But what will it be worth 10 years from now? If we use 2% inflation – a low rate compared to 100 years of history – that $44,000 will only be worth $36,000–18% less purchasing power.

That’s not our idea of a good wealth management strategy to set you up for retirement.

Stay ahead of inflation and develop a total return strategy by investing in great companies.

Our pick on whether investing in bonds vs stocks? Undoubtedly stocks.

But not just any stocks: stocks of great companies.

Stocks are our bread and butter

Since I left Wall Street, it’s been my mission to help hard-working Americans develop a strategy for their investments as they plan for retirement.

While working at Stern Stewart & Co., I learned how great companies use Economic Value Added or EVA® and Value-Based Management (VBM) to create value, and I’ve designed an investment strategy around these principles.

Are you ready to take the next step in your retirement planning? Take advantage of our free, 15-minute financial check-up by scheduling an appointment with me today. I’m happy to help with whatever you need, and I’m never more than an email or a phone call away at david@valuealigned.com or 732-800-2375.