Risk vs. Price Volality???

 

Many of us have read so many times. 

How many of us really get this wisdom from Warren Buffet sunk deeply into our investing Mind and don't allow it to re-surface again?

 

 

3. Volatility is not risk (Warren Buffet)

 

Investors must tolerate far greater volatility in stocks than in securities tied to U.S. currency. But it’s clear that securities tied to the value of U.S. currency have presented truer risk to one’s financial well-being over the past half-century.

If you need money for a home purchase or to fund tuition payments over the next few years, then short-term bonds and cash are required. Stocks’ volatility VIX, -1.34%  makes them inappropriate for short-term goals. 

But if you have a long time frame and can make regular investments, then the risk to your financial well-being is in not owning stocks. So if you’re relatively young, and you’re contributing to a 401(k), for example, you’ll do yourself a favor in old age by making contributions to stocks now and periodically through your life.