đ Holding cash for the long term is risky because of inflation, which erodes purchasing power. While cash may seem safe because it doesnât fluctuate like stocks or bonds, its value declines as the cost of goods and services rises. Over time, this can lead to a loss of real wealth, especially in low-interest environments where returns on savings accounts donât keep up with inflation.
đ Therefore, cash is better suited for short-term needs or as part of a diversified portfolio, rather than as a long-term investment.
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