Ask HN: What do we do with cash now that inflation is a risk?
I never see anyone mention this, but I don&#x27;t buy the idea—perhaps based on a gut feeling versus reading any particular studies—that it&#x27;s wise to just stick your cash into any asset vehicle because inflation is ever persistent.<p>Well it&#x27;s ever persistent for everyone, and if everyone is buying, it&#x27;s not <i>impossible</i> to purchase something beyond its fair value.<p>For instance, if you bought into US equities on Feb 10th, you would have lost over 24% by March 23rd. If you held it until now, you would have made back your losses... but if you bought broad equities on EOY 2021, you would have lost <i>more</i> than inflation up to this point in 2022.<p>Ray Dalio mentioned his confusion about markets not crashing when he was young because the dollar became untethered from gold a second time in U.S. history, and he later realized buying assets when central banks print was a &quot;rhyme&quot; in economics history--these events don&#x27;t repeat perfectly, but similar situations occur over time. In his case, it was a repeat event.<p>But I hate with a passion when people talk about generally what you should do without ever talking about mechanical limits to that type of decision making.<p>It&#x27;s so pervasive that you get studies put out by financial institutions saying you&#x27;re better to always be fully invested, and to never set aside cash. Could you elaborate on that? Or is it because you&#x27;re an institution getting paid on expense ratios based on AUM.<p>The whole attitude industry-wide is gross and conflicting to me.<p>If you refused to buy when general equities were historically high at any point in time and held on to cash while eating inflation, when market prices came down and you bought when valuations were fair value you would have <i>made</i> money, you didn&#x27;t lose it simply because inflation was present. It always is. But you have a choice of whether you want to buy a dollar of assets for two, or if you want to buy a dollar of assets for 80 cents. That&#x27;s NOT MARKET TIMING. That&#x27;s refusing to buy something when it&#x27;s overvalued, but people so grossly conflate the two that you can&#x27;t have any reasonable discussion with a layperson about this concept because catch-all sayings predominantly reside in average investors&#x27; minds over studies and historic figures about asset management.<p>Buy low, sell high! Buy and hold forever! Yeah, but what is &quot;<i>high</i>&quot;? And why would you hold something that is dying?<p>I feel like the pop literature available to the public that is digestible covers some reasonable concepts but I think there are studies that either haven&#x27;t been independently recreated to back simple common questions for the above average person, or they haven&#x27;t been performed at all.