MICHEL PIREU: Owning company shares a better bet than holding cash
The real value of cash is always sinking while shares offer an opportunity to reinvest capital at higher rates of return
From the future speech of some great economist: “Dear ordinary people, it gives me great joy to announce that we are introducing negative interest rates at 3%. Our economic theory demonstrates that this step will bring you enormous benefit. It is true that we will take 3% of your savings each year, but do not forget the most important thing — that at least something will still remain for you. After 20 years, it still will be a bit more than a half.”
Holding cash has historically been a bad investment choice because its real value is always sinking. “Today the situation is even a bit worse, and may get even worse,” says Daniel Gladiš in a Vltava Fund letter to shareholders. “Some economists are seriously recommending substantially negative interest rates — to start with on the level of -3%.”..
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.