Comments on: Do Stocks Get Less Risky With Time? http://amateurassetallocator.com/2008/06/26/do-stocks-get-less-risky-with-time/ Amateur Asset Allocator Fri, 10 Feb 2012 18:16:33 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Rob Bennett http://amateurassetallocator.com/2008/06/26/do-stocks-get-less-risky-with-time/comment-page-1/#comment-1492 Rob Bennett Tue, 01 Jul 2008 21:38:13 +0000 http://amateurassetallocator.com/?p=189#comment-1492 My view is that the riskiness of stocks always depends on the valuation level that applies on the day the stocks are purchased. So stocks bought today (when prices are sky-high) are a lot more risky than the number above (which do not include an adjustment for today's valuations) suggest. However, the historical data indicates that that risk does diminish over time. Stocks purchased at today's prices may well provide a poor return for 10 years or even 20 years. After 30 years, however, even stocks purchased at high prices should provide good returns. Rob My view is that the riskiness of stocks always depends on the valuation level that applies on the day the stocks are purchased. So stocks bought today (when prices are sky-high) are a lot more risky than the number above (which do not include an adjustment for today’s valuations) suggest.

However, the historical data indicates that that risk does diminish over time. Stocks purchased at today’s prices may well provide a poor return for 10 years or even 20 years. After 30 years, however, even stocks purchased at high prices should provide good returns.

Rob

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