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Wednesday, June 19, 2013

The Cost Of Sitting On Cash

CHART OF THE DAY: US Household Net Worth Just Hit An All-Time High

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Wednesday, June 19, 2013
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The Cost Of Sitting On Cash
       

When investors get scared and they have nowhere to hide, they move their money to cash.

Cash is arguably a great place to store your wealth briefly until you make your next investing move.

However, cash itself is not really an investment.

"The one thing I will tell you is the worst investment you can have is cash," says Warren Buffett.

Why?

Inflation.

"Perhaps it is self-evident, but it is worth reminding ourselves that inflation is the major downside of holding cash," write the folks at BlackRock. "Even in the low-inflation environments in much of the developed world, returns on cash have not kept up with consumer price increases. So the value of cash diminishes in real, or inflation-adjusted, terms over time."

From BlackRock

Read »



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