Reply to Too much money on the sidelines

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[quote=Anonymous][quote=Anonymous]Why is everyone so scared of a market correction and yet no one talks about the risk of inflation? A market correction is a quick event - a few months to a few years. Then stocks recover. Inflation on the other hand is virtually guaranteed and over long periods is devastating to cash holdings. Even with interest, the real return on cash is about 0%.

I hold enough cash to cover expenses for a few years and to keep me psychologically strong and not tempted to sell in a major downturn. The rest is always invested. [/quote]

Blame the media? They freak out if the stock market goes down more than 1% in a day. Then all the dummies call or text you saying that the dow is down 500 points or whatever! I have no idea what that means because I don't own the dow index and I just don't care. Inflation can be devastating but it just doesn't seem as scary as a MASSIVE MARKET CRASH!!! So yeah, people are more impacted emotionally by volatility rather than the real risk of not meeting their goals because they were too conservative with their asset allocation. [/quote]

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