Over most long term timeframes (greater than 10 years), stock portfolios have historically tended to outperform bond portfolios. Certainly that has not always been the case, in fact the recession that began in 2008 created a series of trailing comparables where stocks underperformed bonds. Generally speaking though, history tells us that the longer term an investor's timeframe, the more invested in stocks he or she should be.

Having said that, stocks have always generated those returns in a much more volatile fashion. Simply put, the highs are higher and the lows are lower. These oftentimes dramatic fluctuations can be extremely disconcerting to investors. Risk tolerance is a highly personal trait, no chart nor historical analysis will ever make any of us more or less risk averse or tolerant. At SGL Investment Advisors, we try to match our individual and institutional clients with portfolios that both make statistical (timeframe) and psychological (risk tolerance) sense. It's of utmost importance to us that our clients sleep well at night.