Warren Buffett Weighs in on Inflation and Risk

Written by Jeff Helms

May 8, 2015


Warren Buffett Weighs in on Inflation and Risk-media-1

If someone were to ask you, what carries the highest risk — cash or stocks? Before you are tempted to blurt out, “stocks,” take a moment to listen to the advice of Warren Buffett, CEO of Berkshire Hathaway.  

Mr. Buffett finds that cash is actually the loser, thanks to inflation. The problem: people equate fluctuation — the daily movement of stock prices up and down — with risk. But Buffett warns, “Though this pedagogic assumption makes for easy teaching, it is dead wrong: Volatility is far from synonymous with risk. Popular formulas that equate the two terms lead students, investors and CEOs astray.”

But what is risk, really? Take a moment to read this article from Market Watch to learn more about the risks of stock and cash investments and why avoiding stocks for the “safety” of cash is a mirage for your retirement.

Contact First Coast Wealth Advisors for your financial-check up or to set up a retirement plan. Our dynamic approach provides clients with the peace of mind and confidence they desire to achieve their lifetime retirement goals.