I’ve posted Entry #57 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Stocks Are Less Risky Than Certificates of Deposit.
Juicy Excerpt: Inflation is built into the numbers for indexers. The average long-term return for stocks is 6.5 percent real. At a time of 6 percent inflation, stocks would need to provide a nominal return of over 12 percent for the average long-term return to apply (as it must if productivity remains roughly equal to what it has been in the past). So the risk for Valuation-Informed Indexers is slight. And the big risk for CD owners does not apply for Valuation-Informed Indexers.