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Cash is the investment where you expect to lose the most. Hedging against cash losses (also known as inflation) is largely why people chase other investment opp
by randomdata 4y ago
Cash is the investment where you expect to lose the most. Hedging against cash losses (also known as inflation) is largely why people chase other investment opportunities.
Cash is the easiest investment to hold. If it were stable it would be very attractive, but it is not. The monetary system works hard to ensure that it isn't stable, with mandated targets to ensure that cash holdings lose money every year.
- pessimizer 4y agoIf we're talking about securities that are losing money, they can't be beating inflation. You're talking about securities that are beating inflation. i.e. iff your security is worth fewer dollars than it was worth some period of time ago, it is losing money. The fact that dollars have also lost value during the same time means you've lost more money, not less.
- randomdata 4y ago> You're talking about securities that are beating inflation. I said no such thing...? > iff your security is worth fewer dollars than it was worth some period of time ago, it is losing money. And if it sells for more dollars than in the past, but not commensurate with the decline in value of those dollars, then you've still lost money. Less money lost than would have been by holding dollars, but still a loss.