Welcome to Fusion Fix-It Fridays, the podcast that simplifies financial strategies, hosted by Jonathan Blau, CEO of Fusion Family Wealth. In today’s episode, Jonathan tackles “The Myth of the Risk of Stocks.” Drawing on over 30 years of experience, he challenges the common fear that investing in stocks jeopardizes retirement savings. Instead, Jonathan explains why the real risk lies in inflation eroding purchasing power—what he calls "the disease of money." You’ll learn how long-term investments in great companies, like those in the S&P 500, can outpace inflation, while bonds, often considered “safe,” may diminish wealth over time. If you’ve ever wondered how to make smarter investment choices, this episode is for you. Let’s get started!
IN THIS EPISODE:
- [0:21] Jonathan’s topic is the myth of the risk of stocks
- [2:00] Investors selling into a temporary decline because of fear of risk
- [4:51] Bonds freeze the value of your dollar during inflation
- [10:02] Jonathan’s recommendations
- [13:07] Becoming antifragile and fighting “this time is different”
KEY TAKEAWAYS:
- The "risk of stocks" is often misunderstood. Long-term investments in diversified portfolios, like the S&P 500, are not inherently risky if left to grow through temporary market declines. Instead, the absolute risk lies in failing to protect purchasing power against inflation, which bonds cannot adequately do.
- Stocks vs. Bonds Misconception: Conventional wisdom often misrepresents stocks as risky and bonds as safe. However, over the long term, stocks consistently outpace inflation, protecting and growing purchasing power, while bonds risk eroding it due to fixed returns and inflation.
- The Psychological Barrier: Investors' fear of stock market volatility often stems from psychological misconceptions rather than historical evidence. By selling during temporary declines, they create permanent losses, highlighting the need for a shift in mindset to embrace long-term growth.
GUEST BIOGRAPHY:
ABOUT THE HOST: Jonathan is the President and CEO of Fusion Family Wealth, founded in 2013 to focus on behavioral finance and guide clients toward rational financial decisions. A sought-after speaker in wealth management, Jonathan previously held senior roles in tax and estate planning at Arthur Andersen. He has a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island, Jonathan is active in the local business community, supports causes like the Middle Market Alliance and Sunrise Day Camp, and enjoys boating with his family.
RESOURCE LINKS
Fusion Family Wealth - Website
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Risk, Inflation, Purchasing Power, Fusion Family Wealth, Investment, Wealth Management, Behavioral Finance, Behavioral Investment Counseling, Investor Behavior, Stocks, Bonds, Volatility, Safety, Growth, Wealth, Psychology, Diversification