IT has often been said that cash is king. And in some cases that may well be right. If you are buying a car for instance and looking to negotiate hard (as we all should), then yes, cash is king.
Or maybe if you are buying a suit in the sales or some home entertainment equipment, then sure, cash is king. But not for everything.
At this point in the financial cycle -- a time of clear hardship for most; a time when we need our wealth to grow and flourish like never before -- why is it that consumers in Ireland have managed to invest a disproportionately large slice of their wealth in cash.
Cash is an 'asset' that has been one of the worst performing assets over the last 18 months. And yet consumers are enthralled by it.
Some estimates suggest that as much as 12pc of disposable income is being stashed away in deposit accounts that trade risk for return in the worst possible way -- no risk and no return.
In contrast, returns on investment funds are delivering double digit returns like World Gold Funds with returns as high as 31pc.
And natural resources is not alone, take Asia Pacific Funds or US Equity Funds where returns as high as 26pc and 23pc respectively have been recorded.
Among the factors driving consumers to put their hard earned money on deposit at rates as low as 1pc or 2pc is fear.
Another reason is the irrational exuberance of the herd and right now the herd is once again saying the wrong thing. The herd is saying 'risk is bad'.
The herd is wrong and smart investors know this to be true. Smart investors don't follow the herd, they lead it.
Look at any bubble and you will see the herd. Look at any herd and you will also see the vultures gorge on the remnants left in the aftermath and now more than ever we need to learn from the mistakes of the past.
Take dot.com. It's barely over a decade since vast amounts of Irish investors jumped aboard the 'new world' technology bandwagon that had rolled into town from California encouraged by the upward trajectory of this new market called the NASDAQ.
It was great to be at the front of the herd but the poor souls carrying up the rear became the carrion for circling dot.bust vultures.
Now I don't wish to single out Irish investors as being the only ones to make poor and irrational investment decisions; after all the Dutch managed to inflate the price of tulip bulbs to 10 times the annual income of a skilled craftsman in the 17th century.
Nor should foolhardy investments be seen as the prevail of the novice -- as wise a man as Sir Isaac Newton lost huge sums in the South Sea Trading company, leading him to state "I can calculate the motions of heavenly bodies, but not the madness of crowds".
To avoid taking a gamble on one single asset class and to learn for the future, there is a simple action plan to help investors make rational, successful, long-term investment decisions that avoid the herd and avoid the vultures.
Prepare for inflation and reduce exposure to low yielding assets. Whilst our own economy is struggling, we've been importing inflation as the cost of energy and some food items have risen at a rapid pace. All you have to do is checkout the price of fuel at your local station, to see how the increasing demand for oil has had a knock on effect at your local garage as oil moves through the $100 a barrel benchmark.
Prepare for higher taxes. We're going to need a higher return to counter the increased tax take, that means building measured risk into portfolios.
Tune into the good news, there's plenty out there. We're swamped by bad news here at home but have investors really paid attention to the pace and increasing sustainability of the global economic recovery?
Headlines such as "Germany's confidence at highest in two decades" and "US enjoys strong end to 2010 as jobless figure falls" underscore the recovery.
As a result, major equity markets recorded a strong year in 2010, and are now up over 80pc in US dollar terms since they reached a trough in March 2009.
We participate as consumers but are we benefiting as investors? Have a think about what you are buying and see who makes the product.
If you think it's good and others are buying too, well it's likely that somewhere, someone is making a profit on your purchases.
An easy way of participating in the profits of companies like Uniliver and McDonalds is to invest in a High Yield dividend fund.
Capturing the yield is an important strategy as over half of total stockmarket returns earned in the Eurostoxx 600 over the last two decades has come from dividend payments made rather than share price appreciation.
Don't forget all the young, increasingly wealthy consumers in emerging market countries. How much exposure do you have to these markets?
You can access them through an Asian High Yield strategy or by buying into funds that have good exposure to companies with strong trading presence in Asia, such as Swatch and Daimler Benz.
Importantly, take regular financial advice, diversify your portfolio and remember creating wealth takes time.
As the legendary investor, Warren Buffett once said "no matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant".
And finally, remember that informed risk is the basis of informed growth -- risk is good. Embrace risk and it won't let you down.
Michael Gordon is a senior manager with Aviva in Dublin.