Don’t give in to your flight instinct in response to the latest stock market volatility. Running for cover in cash right now promises to be the worst possible move. I know, I know. Cash is supposed to be the ultimate safe haven. A riskless investment, if you will but, in truth, cash is the proverbial “Death Star”. [Let me explain why and show you some irrefutable proof.] Words: 544; Charts: 3
So says Louis Basenese (www.wallstreetdaily.com) in edited excerpts from his original article* entitled Charting the Most Dangerous, Wealth-Destroying Investment in the World.
[The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Basenese goes on to say in further edited excerpts:
When investors worry or panic, they scurry into cash like a toddler into their parent’s bedroom during a thunderstorm but, as Warren Buffett said, it doesn’t do a portfolio any good. Not if you hold on to it for more than a few months and here’s the irrefutable proof…
The dangers of cash are particularly troublesome if you’re in (or close to) retirement because at that stage of the game…doing so actually increases the odds of outliving your assets thanks to longer average lifespans.
Consider a $500,000 portfolio, with 5% inflation-adjusted withdrawals each year.
Maybe you think you can overcome the pitfalls of cash by only holding on to it for a few months and then buying back into stocks. In other words, maybe you fancy yourself a savvy market timer.
The numbers suggest otherwise, though.
If cash had a tagline, it’d be the opposite of Nike’s… Just don’t do it! Although it might seem like a safe investment, particularly when stocks start selling off, it’s anything but.
Ahead of the tape,
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.wallstreetdaily.com/2013/06/24/cash-vs-stocks/ (© 2013 Wall Street Daily, LLC All Rights Reserved; If you enjoy reading our no-nonsense, unbiased research at Wall Street Daily, feel free to share it with your family, friends and colleagues. Simply send them this link, so they can sign up for the TRUTH… for free, of course. Have a question or want us to expose the truth? CONTACT US)