How much risk is too much risk when it comes to your money?
What to know if you’re thinking of investing your money
- Many Britons favour cash savings, but inflation consistently erodes the real value and purchasing power of money held in cash accounts.
- Investing in the stock market is presented as the most reliable method for long-term wealth growth, ensuring money grows faster than the rate of inflation.
- Historical data, such as the Barclays Equity Gilt Study, demonstrates that equities have significantly outperformed cash over decades, with cash often yielding negative real returns.
- The article distinguishes between 'risk' (market volatility) and 'risky' (gambling), explaining that long-term investors can navigate market fluctuations for greater future gains.
- Key advice for investors includes diversifying portfolios, considering broad global tracker funds, and ensuring emergency savings are secured before committing funds for at least three to five years.