A market decline announces itself loudly. Your account turns red, the headlines become dramatic, and suddenly everyone has an opinion about your retirement.
Cash is considerably quieter. The balance stays reassuringly familiar while groceries, insurance, and practically everything involving a contractor become more expensive.
That difference makes cash feel safer than it sometimes is. For money you won’t need for a decade, avoiding every market dip can create another problem: missing years of potential growth while purchasing power slips away.
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Safety has more than one meaning
Suppose $10,000 sits in an account earning no interest for 10 years. At an illustrative 2% annual inflation rate, it would finish with purchasing power equivalent to approximately $8,203 today.
Interest helps. If cash earned an average 3% annually, with interest reinvested, it would grow to approximately $13,439 before tax. That’s meaningfully better than leaving it idle, although the return available on savings accounts can change.
Now compare those outcomes with an illustrative investment earning 7% annually.
| SCENARIO | VALUE AFTER 10 YEARS |
|---|---|
| Cash earning no interest | $10,000 |
| Cash earning 3% annually | $13,439 |
| Investment earning 7% annually | $19,672 |
| Immediate 20% investment decline, then 7% annually for 10 years | $15,737 |
These are nominal values before fees and taxes, with no additional contributions. The last scenario deliberately assumes an immediate loss followed by a full decade of growth. It isn’t a forecast or evidence that stocks always recover.
It does show why avoiding an initial decline isn’t automatically the same as achieving the best long-term outcome.
One stock I’d consider selectively
For a small portion of genuinely long-term money, BCE (TSX: BCE) offers a contrarian option from the analyst research I follow.
BCE owns wireless, internet, fibre, and media businesses. Its networks provide services customers use repeatedly, while its Ziply Fiber acquisition adds a U.S. expansion opportunity. Furthermore, the recent announcement of a 1.2-gigawatt (GW) artificial intelligence (AI) expansion adds more long-term value.
I’d consider a small position alongside other Canadian stocks, provided the investor can tolerate a turnaround that takes years.
The business still has work to do
BCE’s second-quarter adjusted earnings per share (EPS) increased 3.2% to $0.65. However, free cash flow fell 9.5% to $1.04 billion as capital spending increased.
Fibre network efficiencies remain an advantage, but Ziply’s construction spending and BCE’s debt burden limit financial flexibility. Competitive pressure could keep customer revenue weak while those bills continue arriving.
BCE’s 2025 dividend cut is another reason not to confuse a familiar company with a guaranteed investment. Its shares could fall further, and the hypothetical 7% return above is not a BCE forecast.
Give cash a deadline
Emergency savings, a near-term home purchase, and upcoming retirement withdrawals belong in accessible, lower-risk holdings. That money has a job, and protecting it matters more than maximizing its return. The question is whether the entire $10,000 genuinely needs that protection for 10 years.
After separating short-term needs, I’d invest the long-term portion across diversified holdings, with BCE only a modest component. A written purchase schedule can help hesitant investors get started. Proper portfolio diversification matters more than making one perfectly timed trade.
Foolish bottom line
Cash protects against market volatility, but it doesn’t automatically protect purchasing power or long-term goals.
Keep the money you need soon secure. Give the money you won’t need for years an investment plan that reflects its longer timeline. A market dip can hurt, but spending a decade waiting for investing to feel comfortable can carry a substantial cost of its own.
