“So you’re saying there’s a chance…”
That was the comment one person on Twitter recounted in light of the above chart1, hearkening back to the iconic comedy Dumb & Dumber.
Investing in the stock market can be treated as if it’s a gamble. Risky? Yes. But comparing it to the casino is not a fair correlation.
Keeping cash is a gamble too. It has worse odds when it comes to outperformance.
Past data favors the S&P 500 every time.
Even in a short time frame like one year, there is still less than a third of a chance that cash would do better than the broad US stock market index. And—get this—the longer one’s time horizon the more cash hoarding looks like risk-taking.
Is investing in stocks a risk you can afford to take? Not necessarily.
Is keeping cash a risk you can afford to take? Depends.
If you or someone you know needs help with this dilemma, take our free risk analysis tool and talk to us.
I’ll tell you one thing…
If it’s certainty you’re looking for, you won’t get it with either. Inflation eats cash. Volatility is the nature of the market.
Welcome to the uncertainty of monetary life and life, life.
The future is not predictable, but you should have a plan.