Balancing the risk/reward in a low interest rate world
Cory
June 17, 2019
Today I am joined by a new guest on the show, John Grace Founder and President of Investor’s advantage. We discuss how he balances the risk/reward in the markets for his clients and some areas that he thinks investors can stay protected.
John Grace mistakenly says that it took only 2 years for stocks to be off 89%. That is not accurate. The Dow Jones Industrial Average (DJIA) was off 89% but the Dow is only 30 stocks. Many other stocks did not decline as much and some even went up during this time. Also he mistakenly says that it took about 20 years for people to get their money back after the 1929 crash. That is not really true. It took something like 8 years. People forget to take into account that stocks paid dividends which averaged 5.5% in the 1930’s. Also I am sure that the vast majority of people bought some shares prior to the stock market peak in 1929 when stocks were at lower prices. The average person did not put all their money into stocks on the day the stock market peaked, did they? Of course not.