David@valuealigned.com
1-732-800-2375

Berk's Blog

Stock Volatility Does Not Equal Risk – and Other Lessons from 4Q 2014

stock-volatility

 

Have you ever heard someone use two words interchangeably that shouldn’t be used interchangeably?

Like ensure and assure, for example? Or effect and affect?

In my line of work, one such pairing has become the bane of my existence: volatility used interchangeably with risk.

 

Stock Volatility Does Not Equal Risk

Stock volatility and risk refer to vastly different concepts.

And you need look no further than 4Q 2014 to realize the difference.

Last fall, European instability, Ebola, and other factors produced more than enough fodder for stock volatility.

Yet none of that caused risk to hit the roof.

The real cause of risk has been and continues to be inflation, particularly its effects on fixed-income investments such as bonds.

Transition to Rising-Income Investments Today

Read my Q4 2014 letter to learn more about the difference between stock volatility and risk.

And consider transitioning your money from bonds to stocks of great companies. It’s one of the best ways to ensure that your investments outpace inflation so that you have enough money to retire comfortably.

As a fiduciary financial advisor and founder of fixed-fee investing firm ValueAligned® Partners, I can help you make this transition starting today.

Whether you live in Red Bank, New Jersey; Middletown, New Jersey; elsewhere in Monmouth County, New Jersey; or across the U.S., I can help make your retirement even more comfortable.

Simply contact me today at david@www.valuealigned.com  or 732-800-2375!

 

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