Stocks for the Long Term?
It is a cardinal rule of finance that with higher potential return comes more potential risk. But how have the ranges of returns of various asset classes actually compared over time? The historical data may surprise investors and justify taking a second look at asset allocation.

  • Though stocks may fluctuate much more than bonds in the short term, the range in equity returns has been consistently higher over longer time periods. 

  • Using 20-year rolling annualized returns, the minimum equity return has been higher than that of bonds while the standard deviation, a statistical measurement of risk, is less than 1% higher. 

  • Stocks have consistently outperformed bonds and investors may thus want to re-think their asset allocation for the long term.

The views expressed are the views of Fred Alger Management, Inc. as of November 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares. 

Risk Disclosure: 
Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies' securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments. 

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