Sentences with phrase «stocks over bonds because»

This notion is further supported by the inherent risk premium for stocks over bonds because stockholders are behind bondholders in the first lien on a company's resources in bankruptcy.

Not exact matches

That's because average stock market returns have been higher than those on bonds and savings accounts over time.

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.

I stand by the fact the SEC wanted control over FIA's because their are billions of dollars coming out of the stock and bond markets.

Most bond investors take a buy - and - hold strategy, partially because bonds are less liquid than stocks but also because the income characteristics of bonds are attractive over the long - term.

Because this is a matter of the level of risk tolerance I think there is no point in arguing and trying to point out how over long run stocks outperformed the bonds.

To give a typical example, I recently received an email from a reader whose advisor told him the Global Couch Potato is poorly diversified because it contains only three funds — he apparently had no clue these three funds contain over 750 bonds and almost 2,000 stocks in more than 20 countries.

But no one can claim that stocks will return 9 % and bonds will get 5 % over the next 25 years just because those are the historical averages.

I say this because the stock market overall lost 37 % of its value in 2008, while the bond market gained a little over 5 %.

The stock market has, over time, consistently provided investors with higher returns than «safer» investments like certificates of deposits and bonds — but there are also risks because buying stocks means acquiring an ownership interest in companies.

While stocks are riskier than bonds or CDs because there's no guarantee individual companies will succeed, the stock market outperforms safer options over the long - term.

«Because he's right, over long periods of time stock returns probably are going to be higher than bond returns.

Because stocks typically have higher returns over time, as your portfolio grows, you will end up with a greater proportion of stocks to bonds.

Just as you undertake each of these expecting good results, you invest your money in a stock, bond, or mutual fund because you think its value will appreciate over time.

Age - based investment options are often a popular choice among families saving for college with a 529 plan because they reallocate a percentage of assets out of equity - based funds (which have more stocks) into more conservative, income - seeking funds (such as bond and money market funds) over time.

Also, like the Fortune column points out, the thesis that interest rates will inevitably rise, so bonds are a bad idea but stocks are now undervalued because of wide premiums over bonds is seriously flawed because if bond yields rise, it will be bad for bonds but the equity premium will drop as well, so it may not be necessarily good for stocks.

Because of the difference in returns between stocks and bonds, they won't rebalance themselves over time.

In Article 7.3, we found that the normal advantage of bonds over cash as ballast in a mixed portfolio with stocks is currently absent, because bonds are not expected to provide a real return above inflation anytime in the foreseeable future.

But because of the limits features like participation rates and caps place on returns, the value of your annuity may grow much more slowly over the long run than had you simply put some of your money in cash and / or short - term bond funds for security and the rest in low - cost stock index funds.

The two regulators have been engaged in a public spat over who controls ULIPs, which invest heavily in stocks and bonds and get promoted much more by intermediaries as against mutual funds because of higher commission payouts.

This is because unlike other types of permanent policies, variable life insurance gives you complete control over your investments - be they stocks, bonds, or money market funds.