Anyone here hanging on to cash, rather than investing it into the market? Outside of the IRAs and 401ks and emergency cash reserves.


I've just taken on this attitude about cash over the last 6-9 months. Getting 5% back and not buying into what some people may think is an overvalued market. Don't get me wrong, I still think there is room to invest, I'm just not putting all everything I could into stocks/mutual funds.

Thoughts?

 

Cash is king, keeping it around is not a bad idea. If you have a well balanced portfolio, no harm in keeping some cash on hand.

 

My thoughts too...

 

August and September can be brutal months for holding stocks. I'm about 50% cash now and feel comfortable with this position. The Oil stocks continue to rise and the financials continue to fall (for shorting). I'm watching closely the Advance-Decline indices because something is not right with those- we hitting record highs but the decliners are increasing.

 

What are the typical returns from 401(k)s a year? I know it obviously varies depending on what you invest in, but by purchasing a 1 year CD from ING getting 5.35% is a nice return.

 

In a market like this, you'd better be getting double digit returns or you're not doing something right.

 

Ah n/m then. I have yet to start my 401k, my benefits begin in September. Guess I better do some researching

 

Don't talk about-- playoffs? You kidding me? Playoffs?

 

I've always been a cash guy, to a fault sometimes.

 

You are after all, teh Green Monster! :wink:

 

I've been reducing my cash position. I've recently bought some tech and and retail stocks hoping for a fall run-up.

But nothing wrong with keeping some cash earning 5% for doing nothing.

 

Yup. I don't have it all invested, have some just sitting there. My return is only 3.5 or 4 percent but its nice to have it all in the same place

 

Warren Buffett likes 30% in cash or equivalents, I think he has at least a small clue so I follow his advice.

There are some tidy places to stash it that make a decent (8% or so) return.

 

Where are these tidy places?

 

I recall reading somewhere years ago that the amount of cash reserves should equal one's age. I'm not entirely sure if it was proper advice, but I have personally followed this approach. If you're twenty years old then you should have twenty percent of your portfolio as accessible cash. If you're fourty, as I am, then fourty percent is an adequate number for cash reserves. Sixty years of age, then sixty percent cash.

Terry

 

I keep a large chunk in cash as well. Let's just say I'm not living off of dog food right now, so the security is worth more than a couple extra percentage points on the return.

 

There are some very nice money markets. Also tax free MARS are giving 5%+ after tax equivalent and are instantly available like cash.

Tbills are not as liquid but are very secure.

 

Historically speaking, the asset allocation model referred to fixed-income in general, ie bonds. Most people forget about bonds because they aren't very sexy cocktail banter.

I have roughly 30% of my portfolio in bonds, but I don't buy bond funds because they are generally expensive. I buy individual bonds instead.