After all the turmoil in property and stock markets in recent years, many people have chosen to put their savings or pension into cash-only instruments. Is this playing it safe or plain stupid?
Zurich Life, which are one of the companies that provide pensions and investment management services for Ocean Finance’s clients, have just published an online publication which examines the disadvantages of leaving all your savings in cash form.
The report is entitled Planning for Your Future: Investing in Cash is not Your Only Option and it a jargon-free guide which compares how your savings might perform if you had a broader mix of investments over the long term.
We have embedded the pdf below but here a few key points which it raises:
3 KEY TAKEOUTS
Given that bank interest rates are extremely low at present, your savings are likely to be eroded by inflation rather than yielding a proper return.
Over the last 10 years a hypothetical investment of €10,000 in shares and bonds instead leaving cash in the bank would have yielded a far bigger return by a factor of five in many cases.
Any further increases in inflation could erode your cash deposit assets even further so having a more balanced investment portfolio is probably needed in order to provide for yourself and dependents going forward.