Which Risk?

In the textbook, we concentrate on risk based on the volatility of an asset. However, there is also purchasing power risk, that is, the return on your investment won't keep pace with inflation. To give you an idea of purchasing power risk, 20 years ago a gallon of gas cost $1.36. As an investor, you may not like the volatility of stock investments, but, over the long-term, investments in safer asset classes such as Treasury bills, CDs, and savings accounts have barely outpaced inflation.