Transcript
Maria Bruno: There is an option price to staying in hard cash both acquiring far too a lot for your portfolio in hard cash or staying in hard cash for far too prolonged. It might really feel risk-free but, in essence, you’re staying in the sidelines and you’re foregoing market participation. So you might really feel like you’re remaining risk-free due to the fact you’re preserving your cash. On the other hand, when you feel about inflation over time, you’re really reducing your buy power due to the fact your portfolio is not able to grow with inflation. So that is a massive risk over time. So that would be my most significant caveat in conditions of staying out of the market.
The other factor is the things that are keeping you from obtaining out of the market, what’s likely to make you really feel at ease as an trader to get back into the market. And, in essence, it is market timing.
Tim Buckley: Maria, I would say the particular person who is considering of likely to hard cash just be at ease with that conventional of dwelling that you’re dwelling very well beneath your signifies, you’re likely to hard cash due to the fact you want to consider risk off the table, and, look, you’re likely to shed acquiring power over time. But if it can help you snooze superior at night and you’re at ease that dwelling beneath your signifies and you’re likely to be that way due to the fact your signifies will be eroded via inflation over time, then, hey, we’re not likely to notify you do not do that. But, Maria, you bring up some good points about why it is just for people individuals who are very very well off and dwelling beneath people signifies.