Shares vs Dollars – Is it better to buy shares or dollars

Trading concepts

Is it better to buy shares or dollars? Or should you keep cash in dollars or buy stocks? It isn’t a simple question and its answer isn’t simple either. There are numerous factors you need to keep in mind before making your decision. Let’s discuss whether is it better to buy shares or dollars and learn all about what you need to know. 

Is it better to buy shares or dollars? 

Are you thinking about a simple “yes” or “no” answer to this question? Unfortunately, you are wrong. We cannot simply say it is better to buy shares or it is better to buy dollars. There are several factors that we need to consider before the conclusion. 

The world has witnessed a prolonged bull run of stocks after the 2008 financial crisis. Stocks have been generating quite remarkable returns for investors for years now. On the flip side, we find rates have decreased significantly on saving accounts. That’s why investors are more inclined to buy stocks. Let’s dive deep and find out if is it better to buy shares or dollars. 

Key factors to consider about stocks

As you know, trading and investing belong to a very risky arena. There are bull runs and bear runs in this arena. That means there are ups and downs in this arena. Therefore, it is important to know the risks associated with trading stocks and investing in stocks. 


Volatility is one of the major risks associated with stock trading. Volatility means stock prices can quickly move in one direction and may cause significant losses. For example, high volatility causing huge price declines may lead to panic selling. Therefore, it is a big risk that can be overwhelming for investors on a daily basis.

A government’s monetary policies

A government’s monetary policy also affects an interest in stocks and investments. It has a huge impact on the investment demands of the market as well as how people allocate their money. For example, lower interest rates for saving accounts lead to higher investment interest. Whereas, higher rates make people save and earn a steady income. 

Corporate profits

It is quite obvious that stock prices reflect corporate profits. Huge corporate organizations reporting high profits and distributing high dividends trigger high interest among investors. So, we can say that corporate profitability is another key factor that helps to know whether is it better to buy shares or dollars.

Shares vs dollars – Is it better to buy shares or dollars

Is it better to buy shares or dollars is a tricky question. It makes you consider a lot of factors to decide whether you should invest in stocks or hold dollars. Consider the following key factors to make it easy for you to decide. 

  1. As we have already discussed, you need to consider interest rates when choosing between shares or dollars. Shares over the past few years have yielded high returns for holders. Conversely, rates on saving accounts are very negligible and yield substantially low profit. 
  2. Another factor is money’s buying power deteriorates over time. It is inflation that causes deterioration and the world is facing inflation for quite some time now. In fact, rates paid on saving accounts are significantly lower than the inflation rates.
  3. A company’s stability, profitability, and dividends are also important for deciding whether to buy shares of the company or hold cash.
  4. It is also important to analyze the growth prospects of a company and its stock’s value. You need to make sure that the company you are investing in is safe to invest in ]in the current market conditions. 
  5. Finally, your attitude to risk and investing goals are also important. For instance, an investor is willing to take a high risk to get high returns to invest in stocks. Conversely, an investor who cannot take the risk and prefers to earn a steady income always remains on the safe side.

The wrap-up

It is time to conclude “is it better to buy shares or dollars”. It is safe to say now that investing in dollars or holding cash means letting your assets depreciate. Buying power of your money gradually depreciates. Furthermore, rates in savings accounts are quite low and yield very low returns. Contrarily, if you invest in a company with huge growth potential, your cash will appreciate instead of depreciate. Your money will grow with increasing stock prices. Therefore, it is better to buy shares instead of dollars.

Russell Crane

Russell Crane

Russell is an Algorithmic & Technical Analyst Trader @ PatternsWizard.
His passion is to share his knowledge about TA, patterns & more. Why hope for your trading to work when you can precisely know the performance stat of every pattern?

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