Additionally, since the fund is comprised of NASDAQ stocks, it will tend to more more volatile than a broader market index like the S&P 500 and of course,
other safe investments with lower volatility that rely on income for net returns rather than capital appreciation.
For retirees and other conservative investors, having substantial assets set aside in cash and
other safer investments makes a lot of sense, and they have to expect to underperform the stock market in good years.
For her part, Beder wonders what happens when stock markets fall, and those same institutional investors start looking for things to sell so they can hold more money in cash and
other safer investments.
If you're the ultraconservative type of sticks to GICs and
other safe investments, you may have to save a quarter of your net income to retire a millionaire.
With an 8 % annual increase for each year you delay, there are
no other safe investments that give you the lifetime income growth associated with delaying social security.
The more risk - averse a plan is, the less capable it is of funding inflows, and the older the plan's participant population, the larger the proportion of assets that will go into bonds and
other safer investments.
Owners of common stock have no guarantees, but are accepting the risk in exchange for potential greater gains than
other safer investments.
Endowment policies combine risk cover with financial savings, and are thus seen as an alternative for fixed deposits and
other safe investments.