Most investors fall somewhere in between, accepting some risk for the expectation of higher returns.
In the field of economics, this decision is driven by finding the investment strategy that has the highest utility.
Investors frequently pick investments to hedge themselves against inflation.
[2] During periods of high inflation investments such as shares tend to perform less well in real terms.
It is recommended in finance a minimum of 6 months to 12 months expenses in a rainy-day current account, giving instant access before investing in riskier investments than an instant access account.