http://www.businessinsider.com/warren-buffett-the-investment-everyone-thinks-is-safe-is-actually-the-riskiest-in-the-world-2012-2
This is an interesting article about the comparative risks of investment and cash. According to Warren Buffett, cash, which many consider to be the safest investment, is actually the riskiest. The reason for this seemingly counterintuitive observation is inflation. Any cash saved is virtually guaranteed to continuously lose a great deal of its value due to constant inflation. To illustrate just how major a factor inflation is, a dollar today has about the same value as 3.8 cents in 1900.
Buffett does not, however, recommend having no cash. The depreciation of cash can be made up by its flexibility in some circumstances, such as when one would otherwise need to sell long term investment when their value is low to raise money. Still, money is generally safer when invested than left to gradually lose its value.
1 comment:
I am always interested to hear about new ideas in the world of investing. Buffett is one who has had amazing success in this field and anything he says is definitely worth listening to I would say!
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