When investors get scared and they have nowhere to hide, they move their money to cash.
Cash is arguably a great place to store your wealth briefly until you make your next investing move.
However, cash itself is not really an investment.
“The one thing I will tell you is the worst investment you can have is cash,” says Warren Buffett.
“Perhaps it is self-evident, but it is worth reminding ourselves that inflation is the major downside of holding cash,” write the folks at BlackRock. “Even in the low-inflation environments in much of the developed world, returns on cash have not kept up with consumer price increases. So the value of cash diminishes in real, or inflation-adjusted, terms over time.”