NY Times: Long Term Stock Plans Help Avoid Impulse Moves

Dave was quoted in the New York Times on the comparative dangers of short-term market volatility and long-term inflation:

”What changes, and very redically, is risk perception,” said Dave Yeske, a financial planner in San Franciso. “The scariness of short-term volatility disproportionately blinds us to the long-term scariness of inflation.” he added, saying that the recent inflation rate of 3.6% would erode your purchasing power by half in 20 years.  (“Long Term Stock Plans Help to Avoid Impulsive Moves,” New York Times, September 15, 2011)

Unfortunately, the article then goes on to quote several people who recommend such low equity allocations in retirement that the retiree would have almost no prayer of overcoming those long-run inflation risks.