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Old 10-29-2012, 12:20 PM   #39
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Hameister's Avatar
Join Date: Sep 2012
Location: USA
Posts: 887
Default Re: The "Non-Political" Political Thread

Originally Posted by root View Post
government bonds are just stocks in the country but by another name, they are guaranteed no loss, in numbers, but real term losses given inflation etc or falling interest rates are not guaranteed.

I thought I covered it nicely with the point, if you have a middle of the road portfolio of products then it's not surprising that whilst you are insulated against any particular shock, in the case of company stocks this could be poor profits, bad forecasts bankrupcy etc, but you will find that the general economy has a much greater swaying effect on your portfolio.

facts are, those who bought "investment products" gambled. -there was never a guaranteed increased return.
It is apparent from your comments that you are not familiar with Bonds, Treasury Notes, or a CD. You keep referring to stock portfolios. If you had ever purchased one of these instruments, you would never describe them in that fashion.

These have no risk! Nada, 0% risk. People purchase these because they want a guaranteed return. Because they do not wish to risk their money. When you buy these investments, you are told that they mature at a certain time. You are told the guaranteed interest rate they will pay.

My earlier point was that traditionally, for many decades, retired people could always rely on purchasing a CD for instance at 4.5% that would guarantee them $450 on a $10,000 CD in 1 year. Or, a municipal bond that would be gaurenteed to pay 5.7% a year for 10 years. Now because of this economy, a CD is only earning .3%, which pays almost nothing on that same $10,000. The money is still guaranteed income, it's just far less than it should be, and that's a result of the Fed. trying to stimulate the economy by printing more money. You need to stop mixing up the stock portfolio risk takers, with the folks who purchase guaranteed, no risk investments.
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