Are You Doing the Right Thing to Sleep on 100K in Savings Until Stocks & a Real Stock Market Crash to Invest?
Your question is based on the assumption that money will keep its present value. But is this the case? A currency is not a physical unit, and monetary markets are subject to many interventions… Evaluating financial performance based on such inconstant units such as legal tender currencies could prove to be very approximative in the long run.
Historically, the properties of a rich man were evaluated in acres and castles… . Today everybody is happy to reevaluate the same real estate properties, and depending on the juridiction to be taxed on the benefit derived of these reevaluations, … ;))
Stock bubbles, real estate bubbles certainly do exist, but so do also monetary crashes…
To a significant extent, the present stock and real estate price levels can be explained as an anticipation of future devaluations of money. Markets tend to evaluate very carefully the relative evolution of one currency to another. They are much less concerned about the link between money and the physical world.
Which is absolutely normal because most market participants do profit from this “performance” resulting from a built-in devaluation of the currency. The official definition of inflation, which is based on consumer good price levels, is conceptually weak. If you were to link inflation on the price level of investment goods, given the same economy, economists would speak of a deflationary economy.
I have discussed many aspects of this question at length in the context of private money and more particularly of “free money” here: