DEAR READER: You don’t say so directly, but you must be risk adverse. It is true there was a time when CDs were earning 5 percent or 6 percent and they might have been attractive, but they most certainly are not now. At best they are a break-even proposition, taking taxes into account.
I am constantly being asked about my remarks regarding a 7 percent annual return. At the risk of redundancy, since so many continue to ask, my contention and my experience is that by investing in well-run, large American companies that oftentimes pay dividends, and taking into account growth, 6 percent to 8 percent return is not an unreasonable expectation.
Yes, there is a possibility of loss, and some years you will lose. But over a period of time, experience tells me that the 6 percent to 8 percent is not unrealistic. You should choose well-established companies that are here today and in all likelihood will be around tomorrow.