Having cash is necessary for short-term liquidity, but keeping it for the long term erodes its value. This article explores this topic in depth and offers a fresh perspective on what is of greater risk.
But, invest RM100,000 in a stock portfolio and the very next minute, the value of the portfolio can change. Six to 12 months later, the dollar value could be lower, higher or equal to RM100,000. In short, there is no certainty of getting back that RM100,000. Here is why holding onto cash for the long term is risky and why it is possible for stocks to be a lower risk investment than cash.Take a 10-year perspective. A saver puts RM100,000 into a savings account 10 years back. Today, they can retrieve a little more than RM100,000 due to the interest.
This means the cost of money is cheaper, savers are getting less for their savings and borrowers who know how to use debt to get richer will emerge victorious. Debt is now cash.
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Source: fmtoday - 🏆 5. / 72 Read more »