A different way to think about risk

SINGAPORE (Nov 27): People think the stock market is risky because the prices go up and down every minute. If you avoid investing in the stock market because you think it is risky, you are missing out on the big gains from this asset class.

If you had invested in Singapore stocks from 1969 until today, your returns including dividends would have been 8.79% per annum. That is quite exceptional and properties (unleveraged) do not beat that. You can even do better than 10% per annum if you are a value investor.

If you want to benefi t from investing in stocks, you have to change the way you think about risk. Stock prices zig-zagging is not risk.

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