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This isn't what "near-zero risk" means. Near-zero risk investments are things like savings accounts, CDs, and T-bills. Index funds that track stock-based indexe
by BorgHunter 10y ago
This isn't what "near-zero risk" means. Near-zero risk investments are things like savings accounts, CDs, and T-bills. Index funds that track stock-based indexes are intrinsically risky, as you yourself point out, unless you look at time scales of a decade or more.
- JoshTriplett 10y agoNear-zero risk of what? If you mean "risk of decreasing in value", then checking and savings accounts aren't near-zero-risk either; cash tends to decrease in value over time due to inflation, and you're nearly guaranteed to lose money over time (though somewhat predictably). If you mean "risk of disappearing completely", then neither a savings account nor an index fund will do that. A comment further up the thread asked for "very low risk"; the reply to that changed it to "near-zero risk". Better to consider the type of risk you care about, and how much money you want associated with each type of risk. Checking accounts and index funds both make sense as part of an overall strategy. I don't know that savings accounts do, though, except perhaps as a purely organizational tool.
- icebraining 10y agoRisk is about uncertainty - how well you one can predict what will happen to the money.