Cash Is Not Safe — It Just Loses Slowly
Real purchasing power of $10,000 in cash vs. stocks vs. bonds since 1970
Since 1970, $10,000 in cash has lost approximately 87% of its real purchasing power to inflation. $10,000 in bonds has grown to approximately $35K real. $10,000 in equities has grown to approximately $400K real. The 'safety' of cash is an illusion.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
There has never been a 10-year period since 1970 where holding cash preserved real purchasing power. The 'safety' of cash is nominal, not real.
Real bond returns of ~2-3% annualized barely outpace inflation. Real equity returns of ~7% annualized compound purchasing power exponentially. The gap widens dramatically over decades.
Reframe safety: short-term safety (no nominal volatility) = long-term danger (guaranteed real loss). Long-term safety (real wealth growth) requires short-term volatility.
Match each dollar to its job: cash for spending within the next couple of years, bonds for the middle horizon, equities for the decades — parking long-term money in cash for comfort has historically been the one 'safe' choice with a built-in real cost.