As of late, in most of the interviews I do, I get to ask the questions.
I was back on the other side of the table recently, having a long conversation with the folks at Vanguard. We discussed many of my favorite topics — uncertainty, behavior, the things investors consistently get tripped up by.
You should find something of interest in the entire Q&A, but here is a short excerpt:
Stocks can be highly volatile and some investors wonder why they should take the risk. In your view, what makes stocks a good long-term investment?
Essentially, you’re betting on human ingenuity. Stop and think about how humans progress and how technology and societies move forward. One of the main purposes of Wall Street is to bring together the people who create new inventions and have new ideas with the people who have the capital. The stock market is essentially the place where ideas get funded, and those ideas subsequently change the world.
When you think about the standard of living that has consistently risen over the past century and a half, that typically takes place because some idea is funded and that funded idea becomes a company, and that company continues accessing the capital markets to grow. Its how prices for food and manufactured goods have fallen so significantly over the past century. And the pace of this is accelerating.
It reflects all of the various growth engines of the economy of the country, of the world, and it’s most likely to generate the highest return relative to the risk you assume over the course of your lifetime.
We live in an age of wonders. I love the idea that capital plus invention equals a raised standard of living with a side dish of dividends and economic growth.
From millennials to retirees, investment pro Barry Ritholtz offers deep insights
Vanguard, June 06, 2017