Small cap stocks have outperformed large cap
stocks over long time horizons and definitely have their place in everyone's asset allocation.
Not exact matches
By contrast, consider a young worker with a
long time horizon to save for retirement, expectations of growing employment income
over time, and an aggressive portfolio allocation of 80 %
stocks and 20 % bonds.
Fidelity believes one of the best ways to do that
over the
long term is by considering an appropriate amount to invest in a diversified portfolio of
stock mutual funds, exchange - traded funds (ETFs), or individual
stocks as you plan and implement an investment strategy that fits your
time horizon, risk preferences, and financial circumstances.
While an aggressive type portfolio will naturally fluctuate
over time and has more «volatility,» this is nothing to get scared about because you are saving this money for the
long term and
over a 10 + year investing
horizon you are going to make more money investing in
stocks than in bonds.
Over a
long time horizon, high - dividend - growth
stocks are a lot more likely to keep pace with inflation.
Over a sufficiently
long time horizon,
stocks almost always achieve superior returns.
With a sufficiently
long time horizon, there is little risk to
stock investing, because the impacts of
stock volatility become less
over time.
Fidelity believes one of the best ways to do that
over the
long term is by considering an appropriate amount to invest in a diversified portfolio of
stock mutual funds, exchange - traded funds (ETFs), or individual
stocks as you plan and implement an investment strategy that fits your
time horizon, risk preferences, and financial circumstances.
Most
long - term investors who have at least a balanced portfolio of
stocks and bonds have a high probability of being able to achieve such a hurdle
over a
long time horizon of at least 10 years.
It does instead assume you will have a relatively balanced portfolio of
stocks and bonds in order to generate the income necessary to pay your inflation adjusted living expenses
over a relatively
long time horizon.
This is especially true because you can mostly eliminate price risk by
timing (unless you buy a lot of
stocks in 1999, 2007, etc. you will dollar cost average into a decent enough
stock price) and most macroeconomic risks dissipate
over a
long enough
time horizon.
How strongly is the return in the junk bond market correlated with the return in the
stock market
over medium and
long time horizons?