Larry Fink, CEO of BlackRock, the world’s largest asset manager with approximately $11 trillion in assets under management, warned at the Milken Institute Global Conference on May 5 that keeping money in bank accounts is « one of the worst financial decisions of a lifetime. » He highlighted that nearly 40% of Americans have zero exposure to capital markets, leaving them unable to participate in economic growth. His mathematical argument centers on the gap between a 4% savings rate and a 9% average market return, which compounds into hundreds of thousands of dollars over a career. Fink is also cautioning against mistaking the temporary rise in interest rates for a long-term strategy. Critics point out the obvious conflict of interest, as his business model depends on money moving from savings to investments.
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