Why Stocks Are Riskier Than What Is Claimed By The Financial Industry

I wrote about Zvi Bodie and Rachelle Taqqu in February. Their new book, Risk Less and Prosper, was a subject of a Morningstar article which described long-term investment strategies with a foundation that doesn't include stocks. Wall Street Journal published an article from these two authors describing their issues with stocks and the investment alternatives. Here are two interesting excerpts.

First, the issue they have with stocks:

Despite the assurances of the financial industry, stocks are always a risky investment, and the longer you hold them, the better your chances of getting blindsided by a downturn. The usual way of mitigating that risk, diversification, holds no guarantees, either

And some of their alternative investment strategy

Separate your basic must-have needs from your aspirations or wants, and create an investment plan that guarantees the basics with inflation-protected, safe investments.