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Holding cash can seem like a good idea, but it can be riskier than buying stocks

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Storing away cash for long periods is similar to voluntarily agreeing to lower your salary each year thanks to inflation effects. Read on.

Over time, inflation can erode the purchasing power of your cash, meaning you'll be able to buy less with it in the future than you can today.Many investors focus on market risk, particularly that the overall market will decline, leading to a loss of capital. Market risk is certainly an important consideration, but it’s not the only risk that investors face. There are a number of others to be aware of, including inflation, interest rate and currency risks.

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