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I recently came across a couple of papers that discussed risk in the context of portfolios for the long-run. Which is pretty on-topic for this board when we're talking about investing FOR retirement rather than investing DURING retirement.

Rethinking Risk
Summary of the Abstract:
"For long-term investors, short-term volatility is something they just have to live with and disregard as much as possible. Tail risks, however, are critical because, although rare by definition, they have a large impact on terminal wealth."

"stocks have both a higher upside potential and a more limited downside potential than bonds, even when tail risks strike. Hence, their higher volatility essentially is higher upside risk; that is, uncertainty about how much better, not how much worse, long-term investors are expected to fare with stocks rather than with bonds."

"even when tail risks do materialize, investors are more likely to have a higher terminal wealth by investing in stocks than by investing in bonds."

Also pertinent to recent discussion here: "Different investors assess risk in different ways. The return of a given asset over a given period is whatever the asset delivered; its risk instead is whatever investors perceive it to be."

Optimal Portfolios for the Long Run
David Blanchett, Michael S. Finke, Wade D. Pfau
Summary of the Abstract:
"strong historical evidence to support the notion that a higher allocation to equities is optimal for investors with longer time horizons"

"counterintuitive conclusion that risk-averse investors should demand stocks as a hedging strategy against a long-run drop in real consumption"

"[referenced study] finds that a 100% stock portfolio dominated other strategies for a retiree with a 40-year time horizon over historical rolling periods in the U.S."

"return predictability observed in U.S. data means that all but the most risk-averse investors would hold 100% equities for a 10-year or longer investment horizon"

"[There is] short-run volatility (regular swings in prices), but these prices even out over the long-run toward their long-run average."
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Stocks for the Long Run has been my motto for the last 30 years.

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From January 1966 through December 1982, the S&P 500 had a 0.0T%inflation adjusted return.

From January 2000 through December 2012, the S&P 500 had a negative .7% return.

I love stocks, too I buy some every month automatically.

Like pretty girls, sometimes they'll break your heart but I still like girls.
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"Different investors assess risk in different ways"

True dat
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...and a more limited downside potential than bonds...

I'm not sure I agree with this part. Both stocks and bonds can go to zero. Unless I'm missing some other intent....

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