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We hear it all the time. We see it on every business channel. Our friends tell us at social events. Parents say it at our children’s sporting events. Stocks are risky!!! OK, tell me something I don’t know.” Bonds are safe….wrong! You can’t go wrong with real estate…incorrect!
We are in a very “interesting” economic environment right now and everyone seems to have an opinion. Here’s my thoughts.. Every investment has risk. If you don’t want risk, put your money under the mattress. It’s not an unknown fact that, over time, stocks have a favorable rate of return. But, they can also be very volatile. Bonds move up and down as well. Bonds are not safe! The common thought is that bonds are conservative. They are volatile just like stocks. I don’t need to explain the volatility of real estate with the current state of our economy. Over the years, I have had many people tell me that they don’t want stocks because they are risky so they invest in real estate as an alternative. Well, what would they say if I asked them now to sell their real estate that is not “risky”?
If you are an investor, you need to be diversified and understand risk is unavoidable. Do your research and/or talk to a financial advisor so you can limit your risks and invest your money to reach goals and objectives. Just remember, unless it’s under the mattress, there’s always risk. And in today’s world, that isn’t always safe.
(Frank Morgan, Jr. is a registered representative at Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. You can contact him at 610-367-9000, 610-323-6388, 610-987-6444 or visit www.yourfinancialvision.com)
03/08 - BACK
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