Financial Basics

by Bob Stockdale, Stifel, Nicolaus & Company, Incorporated, Member SIPC & NYSE

First, let me say that it is an honor to be a part of the Dads Divorce team of contributors. I look forward to using this format to address different financial topics on a monthly basis.

Let’s start with a few basics. Have you ever seen the statistics on the longterm returns of various investments? Historically, stocks have returned more than bonds and bonds have returned more than cash (money markets, CDs, short-term treasuries). Which begs the question, why would a longterm investor own anything but stocks?

The answer is volatility. Volatility, or fluctuation, is the price investors pay for the potentially higher returns offered by riskier investments. Many investors would like the higher returns generally offered by stocks but are unable, or unwilling, to deal with the ups and downs of the market. Some investors try to cope by trying to time the market. That is trying to get in and out at the right time. Studies have shown that most investors who attempt market timing fail miserably. The reason is easy to understand. Many people trust their instincts to tell them when to be in or out of the market. Most of the time our instincts are wrong. Think about it. We want to invest more when the market is up and invest less when the market is down. The exact opposite of what we should probably be doing. For most investors, it is better to determine what risk (fluctuation) level they are comfortable with and invest in a portfolio designed to give the maximum return for that level of risk. How do you do that? We’ll discuss it next month.

Bob Stockdale is a Vice President of Investments and Branch Manager of the Stifel, Nicolaus & Company, Incorporated office in St. Peters, Missouri. His services include helping clients, both individuals and business entities, determine financial goals and objectives and develop comprehensive investment plans to help achieve them. He specializes in working with pre-retirees and retirees to secure a comfortable retirement.

Bob is currently host of On The Money, a weekly radio financial talk show on 97.1 FM TALK and has made guest appearances on other local radio programs as a financial professional. He has taught financial classes for adults at St. Louis Community College and hosted numerous seminars in the St. Louis area focused on retirement planning and investing.

Bob’s training includes a B.A. degree from Webster University and an M.B.A. in business from SIUE. He is a Certified Financial Planner professional and a Registered Representative with the NASD.

Bob, his wife, Beth, and their three children live in St. Charles, Missouri.


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