Risk is uncertainty. For example, there is a risk it will rain tomorrow. People who invest don’t like uncertainty unless they will be fairly compensated for it, either now or in the future. All pricing in the stock and bond markets is inherently based on providing appropriate monetary compensation for the level of risk the…
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Can the stock market go to zero?
This is a concern I saw expressed recently online by a new investor. In theory it could happen, but in practice it cannot. In practice, the stock market has steadily increased by well over 6% a year when measured averaged over decades. The stock market is not a zero-sum game, like gambling. The stock increases…