Let’s start this conversation with as of October 17, 2019 that US and Canadian central bank interest rates are below 2%.
This is known as the risk free rate.
Premiums are built on top of this.
Liquidity, credit risk, volatility in revenue, tenure, experience, time, country, industry and other types of risk will cause the required compensated return to go up.
I start the conversation with the rule of thumb that over the last 100 years stocks have historically returned around a 6% return before fees.
Presumably things with less risk will have a lower return and things with a higher risk will have a higher return.
You can take a lower risk asset, add leverage and get a higher return in some cases but now you’ve added risk.
Let’s never forget that your ability to save money is the single greatest contributor to your ability to grow your wealth.
My job comes in the form of optimizing and helping you use that money to make more money.
In this podcast I look at stocks, bonds, cash, real estate, alternate investing such as hedge funds, private lending, participating whole life policies, your own company and yourself.
The point is that you should look at each of your options and make a non-emotional decision.
If you run a company you are a special case and I get into that in this podcast.
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This report is provided by TK Dale Wealth Management Inc. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic, investment and market analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. TK Dale Wealth Management Inc. is not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.