The yield on the money market and other fixed-interest unit trusts is insufficient to beat inflation, while an investment that produces above-inflation returns is exactly what one requires to build and conserve wealth.
Leon Campher, chief executive of the Association for Savings and Investment (Asisa), says that investors seem to believe volatile markets are their retirement capital's biggest enemy.
But the biggest threat is the erosive effect of inflation.
Because so many investors fear stock market fluctuations they gravitate towards conservative investments, but by doing so they sacrifice future above-inflation growth for the sake of present peace of mind, says Campher.
Pensioners, in particular, should take note.
Pensioners are using their capital to supplement their income. Once one's capital ceases to grow, inflation erodes the asset that should produce future income.
Campher said pensioners' investment portfolios should include investments in shares as part of a balanced portfolio.
That is the only way to be sure that capital is preserved.