Investor behavior can be extraordinarily shortsighted. Foolish investors insist on making their long-term decisions based on very recent experience. Lemming-like, they run from gloom and doom to euphoria. In the process, basic discipline flies out the window, and bad things happen to their investment results. Remembering long-term results can keep them from shooting themselves in the foot.
Inflation is the erosion of buying power over time, if dollars are used as a store of value.
In other words, our returns must jump this hurdle in order to provide meaningful increases in value. Because they are guaranteed by the government, and the government can always print more dollars, they carry no credit risk. We shall see that that is not always the case. T-Bills are a good proxy for many savings plans. They track CD rates reasonably closely.