The Investor’s Dilemma

Features | Education | 18 Mins Read | by

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The investor’s dilemma faces all of us: if we don’t invest, the purchasing power of our money will slowly decline; if we do invest, we are exposed to the risk of loss.  This results in many sticking with cash.

A bank account feels safe, but it is a melting ice cube.  The purchasing power of cash will erode in time: a dollar ain’t what it used to be.

But for many, a bank account is seen as the lesser of two evils.

After all, investment offers no guaranteed return and no money-back guarantee.  And there are always stories of investments that have gone wrong.

If someone is unable to invest in a way that preserves capital, is it any surprise they stick with a bank account?  Losing money negates the very purpose of investing.

It is rational to avoid investing if we do not know how to preserve capital.  But it is also rational to learn how to invest in a way that preserves capital.

We can solve the investor’s dilemma if we can invest in a way that preserves capital over the long term.  This offers an investment-style return without the risk of a large and permanent loss of capital.

This article considers how we can achieve this.

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The Investor’s Dilemma

Features | Education | 18 Mins Read

The investor’s dilemma faces all of us: if we don’t invest, the purchasing power of our money will slowly decline; if we do invest, we are exposed to the risk of loss.  This results in many sticking with cash.

A bank account feels safe, but it is a melting ice cube.  The purchasing power of cash will erode in time: a dollar ain’t what it used to be.

But for many, a bank account is seen as the lesser of two evils.

After all, investment offers no guaranteed return and no money-back guarantee.  And there are always stories of investments that have gone wrong.

If someone is unable to invest in a way that preserves capital, is it any surprise they stick with a bank account?  Losing money negates the very purpose of investing.

It is rational to avoid investing if we do not know how to preserve capital.  But it is also rational to learn how to invest in a way that preserves capital.

We can solve the investor’s dilemma if we can invest in a way that preserves capital over the long term.  This offers an investment-style return without the risk of a large and permanent loss of capital.

This article considers how we can achieve this.

Sign up to read full article.

Get FREE access now

Already a member? Login