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Comment on the following statement: as an asset class stocks have generally outperformed both corporate and...

Comment on the following statement: as an asset class stocks have generally outperformed both corporate and government bonds over the last several decades. Therefore, investors are wasting their money by holding securities other than stocks.

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Statement: As an asset class, stocks have generally putperformed both corporate and government bonds over the last several decades. Therefore investors are wasting their money by holding securities other than stocks.

Analysis of Statement: It is true that stocks have outperformed govt and corporate bonds, it cannot be said that investors holding securities other than stocks are wasting their money because stocks are riskier compared to Bond Universe and may not be suitable.for all investor types. Investors who are risk averse or old in age are not suitable candidates for stock investments. Risk seeking or investors starting out their career may be good candidates for equities.

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