I recently posted a Guest Blog Entry at the MoneyCrush blog. It is called On Investing: Risk Could Be Almost Entirely Optional.
Juicy Excerpt: Many top-name people acknowledge the problem. The trouble is figuring out what to do about it. If people come out today and acknowledge that the retirement studies used by millions got the numbers wildly wrong, the millions of people who relied on those numbers are obviously going to be very upset. The other side of the story is that people will be even MORE upset if they learn only when their retirements fail that the numbers were wrong all along and that many people knew this and didn’t tell them.
If we were open with investors and explained to them that stocks offer a poor long-term value proposition when they are overpriced, they would act in their self-interest and keep stock prices at least sane. We hurt ourselves in a very big way by borrowing so much from our future selves. We didn’t know how things worked in the past, so there was nothing we could do about it (when, for example, the bull market of the 1920s caused the Great Depression).
But now we have available to us the research we need to end a great deal of human misery. My view is that we all should be working together to get the word out and to help people learn what they need to learn to earn far higher returns while greatly reducing stock investing risk. My advice to investors is to consider the possibility that most of the investment advice that you hear is rooted in research that may not be nearly as sound as you have been led to believe.