Interest rate risk, tax risk, business risk, purchasing power risk are all types of risk.

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Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume.

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However, if you escape that risk by parking your assets exclusively in cash-like investments, you are likely exposing yourself to the possibility that inflation will silently erode the purchasing power of your portfolio, which can lead to the ultimate risk of not achieving your long-term goals.

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In the United States, the deep recession of 1918 damaged consumer purchasing power and convinced many to park their capital in tax free, risk free, bonds.

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