What About Risk

Total returns are only part of the story. Risk must also be considered. Higher returns are usually associated with higher risk, which is just what the study shows. During the 30 years under study, stock market returns showed an average standard deviation of 3.93, the largest of all the asset classes. (Standard deviation measures portfolio variance and is a measure of risk. The higher the number, the greater the risk.) The CRB Index had the second highest with 2.83. Government and corporate bonds showed

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