Long-term cash saving as investment is risky, experts say
It seems that the financial meltdown of 2008 continues to affect how a lot of people invest their money.
According to a new survey by Bankrate.com, 25 percent of Americans keep their long-term savings in cash instead of other types of investments that traditionally provide significantly higher returns.
Greg McBride, Bankate's senior financial analyst, calls the findings "alarming."
"You're going to earn a return that's so low, it's not going to preserve your buying power. And I think the mindset people need to adopt is that what you think of as safe is actually quite risky over the long haul. Losing buying power is just as damaging as losing principal," McBride says.
If you're too averse to risk, McBride says, you may not have enough saved when it comes time to retire.
"So, particularly for something like a 401-K where you're investing regularly, don't be afraid to allocate more toward the stock market. That's where you're really going to get a better return over the long-haul that's going to help you achieve those long-range goals," says McBride.
Cash is Americans' Preferred Long-term Investment