Financial Edge pulls together the thinking on investing

Your Financial Edge pulls together the thinking on investing

and the investing environment of Paul McCulley, a money manager
and Federal Reserve watcher at Pacific Investment Management
INTRODUCTION 3
Company LLC (PIMCO), one of the nation’s most prestigious
mutual fund companies, and Jonathan Fuerbringer, a financial
writer at The New York Times for 24 years.
In Your Financial Edge, we argue that Main Street investors
simply must take more risk if they want to do well in the years
ahead. This increased level of risk will certainly make some investors
uncomfortable. But the U.S. stock market is struggling to
produce modest returns, returns that are miles away from the big
double-digit gains of the late 1990s. And even a return to the historic
norms for the domestic market means that the average gains
will stay in single-digit territory. As for the bond market, returns
from safe Treasury securities have dipped in recent years to levels
not seen since the 1950s. And even now, after the Federal Reserve
has pushed interest rates higher since 2004, the yield on Treasury
securities is still well below what used to be normal.