posted on Sep, 21 2008 @ 11:45 PM
the issue with not utilizing the stock market and other financial assets for saving for retirement is inflation
wikipedia for inflation concept
So, if you have not fear of a total bank failure in the next three to six months you money is better left in the stock market.
The five year average for the stock market is still up yahoo finance
Even if we are down in the short term... remember investing is a long term event (more than one year). Anything shorter is speculation...
Now you do have a good point when you point out that short term event can effect long term holdings, such as the AIG failure....
well, this is why you diversify. Also, how much of a market share was AIG? and how much of the dip in the market is due to just that one company
pulling out (think the change in water level of the bath tub when you get out. You didn't lose that much water, but it did go down because you left
So, is you money safe right now in the market... not 100% that is why you expect a return on your money. This is also why you get little to no
interest in a regular bank account.
banks, companies, the government; all of these entities pay you for taking the risk of loaning them money... called interest.
the more risky the investment the more you should expect in interest ( same as when you buy a house or car)