Recently I overheard some recent retirees discussing where to out their money. The discussion centered around risk free investments, such as, CDs or U.S. Treasury Bills.

The historic “Risk Free Rate” is about 4%.  In fact, the most recent sale of 5-year Treasury Inflation Protected Bonds sold at a negative yield, first time ever. 

The risk-free rate is the historic return on government guaranteed T-bills.  Think of them as CDs issued by Uncle Sam.  They have a very low return but virtually no volatility.

They seem like a sure thing, but after inflation and taxes, the only thing that’s for certain is long-term losses.  It’s the safest way to go broke.

Investors continue to search for the investment that gives stock market returns with Treasury Bill risks. The Wall Street bullies know this and continue to market exactly this. This type of investment comes at a huge cost to the average investor.

 Really because there is no way to offer a product that avoids risk while providing stock market returns.

Owning a globally diversified portfolio at your risk tolerance level will give you the results you seek, long term. To realize these great long term returns, you must deal with the ups and downs of the equity markets.

To accomplish this, in most cases, you hire an investor coach/fiduciary adviser. Your coach will keep you disciplined during market extremes, both up and down.

To succeed long-term you must own equities….globally diversify…rebalance.