The Investment Scientist

Posts Tagged ‘market risk

[Guest post by Mike Piper] Conventional investing wisdom states that the risk of holding stocks decreases as the length of the holding period increases. But is that true?

The answer depends primarily upon how you define “risk.”

Decreasing Risk Over Time

If you define risk as “chance of losing money,” then yes, stocks have historically become less risky the longer the holding period:

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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