Risk, Uncertainty, Fear, and Gambling

Abstract

We all aspire to “invest” our hard earned savings into financial markets that offer a return in excess of the small but risk-free return on Treasury bonds. With a typical inflation rate of 3%, bonds earning less than 3% do not even keep pace with inflation. They certainly do not build the nest egg we all require for a comfortable and, hopefully, extended retirement. What portion of our savings is truly invested, though, and what is merely rolling the dice?