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Inflation topics can be particularly misleading to new investors who haven’t yet realized that nobody actually “invests” in cash across decades like this exampl
by PragmaticPulp 5y ago
Inflation topics can be particularly misleading to new investors who haven’t yet realized that nobody actually “invests” in cash across decades like this example. At least not if they have basic financial education.
It can also confuse new investors who might not realize that USD-denominated assets don’t lose value like USD itself. This may seem obvious to anyone who has studied Econ or investing, but it’s actually a very common misunderstanding among people who are new to the concept of inflation. Unfortunately, this misunderstanding is often misused to scare people into thinking their only options for avoiding inflation are gold or cryptocurrency, which isn’t true at all.
For 99% of us working our comfortable tech jobs in stable countries, it’s more enlightening to consider how the author would have done with S&P 500 or gold (hint: Gold loses by a lot).
- bern4444 5y agoTo clarify - this isn't to say that non USD denominated assets don't lose value if compared to the currency its denominated right? That is, I could replace 'USD' with any other currency in both occurrences in the phrase: `USD-denominated assets don’t lose value like USD itself.` and it would still be true, right?