Stocks Are Less Risky Than Bonds

It is not stock investing that is risky. It is valuation-uninformed stock investing strategies that are risky. The risks of stocks can be largely avoided by those willing to give consideration to the effect of valuations on long-term returns. It is much harder for investors to avoid the risks of bonds, since inflation is unpredictable and constitutes the biggest risk for bond investors. For the valuation-informed investor, bonds are more risky than stocks.

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Create your own retirement paycheck

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Hedgefunds selling Alpha as Beta?

In a desperate market everything seems possible.
Even selling Alpha as Beta...

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Patron saint of actuaries

St. Buster is the patron saint of actuaries.

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What is Risk?

Peter L. Berstein, author of Against the Gods: The Remarkable Story of Risk, explains it pretty well.  He says by definition risk is a measure of the unknown, and because of that it is silly to presume and act as if we know what the future holds.  Risk management really is understanding that the future is uncertain, and preparing ourselves and our institutions to deal with the times when things are different from our expectations.

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A survey of migration

Despite a growing backlash, the boom in migration has been mostly good for both sending and recipient countries, says Adam Roberts (interviewed here)

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Happiness extends life expectancy

World life expectancy has risen by around 20 years in the last 50 years. This period has also witnessed rising happiness levels around the world suggesting that happiness might be one of the causes behind the decline in mortality. We investigate the relationship between happiness and mortality using the German Socio-Economic Panel. We consider doctor visits, self-reported health, and presence of chronic illness as health measures. After controlling for initial health conditions, we find that happiness extends life expectancy. 10 percent increase in happiness decreases probability of death by four percent, and this effect is more pronounced for men and younger people. Happiness plays a more important role for chronically ill people in decreasing mortality than for those who are not chronically ill. The positive influence of happiness on mortality can offset the negative impact of chronic illness. Marriage decreases mortality and this effect appears to work through increased happiness.

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