Why Cash Loses Value
Purchasing power is a fundamental concept often overlooked.
Inflation is a constant threat to cash's worth and must be incorporated in your overall portfolio planning. It's important to review your portfolios, especially your cash holdings. Cash certainly has strong attributes, but too much cash in a "long-term account," i.e. retirement account, can result in an erosion of purchasing power.
This article is a great refresher on inflation and CPI (Consumer Price Index) and how it affects you.
The reason June's CPI numbers are of importance is:
...it had declined for each of the previous three months – the first three-month decline in over 60 years. Yes, June’s increase was the largest increase in almost 8 years, but that is not surprising as businesses reopened and consumers spent more money.
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