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The risk of inaction exceeds market risk
Investors often fear that the market will drop by 20%. But they ignore the fact that over 3–4 years, inflation is just as likely to eat away that same 20% of their purchasing power if they keep their money in cash.
This is an asymmetric risk: the market can recover and generate profit, while inflation is an irreversible process. Over a ten-year horizon, the risk of "holding" capital in cash is statistically higher than the risk of owning a high-quality, diversified portfolio of stocks and bonds.
Stop measuring risk by asset price drops. Measure it by the loss of your ability to buy goods tomorrow.
#riskmanagement #savings