Warren Buffett Weighs in on Inflation and Risk

Written by Jeff Helms

The financial world is complex and constantly changing. Those changes can impact our clients and their plans for the future. As the firms founder and Managing Partner, making sense of these changes is my job. We try to simplify communication on market dynamics to make it meaningful and useful for our clients.

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.