Why Stock Investments Outperform Other Investments

Stocks have produced annual real returns of 7% for 200 years.

That represents perhaps the best investment return available of any asset class. Stocks are liquid and can be bought and sold with very low transactional costs. By setting sensible goals and anchoring the bulk of their portfolios in stocks of well capitalized companies whose results have shown the ability of management to prevail in today’s increasingly competitive environment, investors can generate returns providing the means to financial security.

The U.S. and other countries provide an increasingly transparent regulatory framework in which companies can issue securities meeting the needs of growing businesses. The many advantages of stocks and their increasing importance through pension funds and other indirect meshing with the financial needs of individuals have made the stock market into a magnet of daily media attention. While many investors may enjoy the activities associated with stock investing, experience has shown that professional advisors can provide more attractive long range returns.

The psychology associated with market swings creates emotional forces that drive most investors to step up their buying as the stock market is cresting and to withdraw from the stocks when the market is slumping. Going against these trends builds profits. Core positions in proven blue chips moderate these cycles. Using professional management takes advantage of them.