August 4, 2011

Cash is ok

There are plenty of types of investments; stocks (either individual or through mutual funds or ETF's), bonds, real estate and commodities such as gold, silver and oil.  There are others too like art, coins, etc.

One investment or asset class gets very little attention and is rarely mentioned - CASH.

The reason cash isn't mentioned very often unless it is to malign it, is because your stockbroker does not get paid when you have cash on the books.  

Whether you pay commissions per transaction or are in a fee only account, cash pays your stockbroker, financial advisor or financial planner absolutely nothing which is coincidentally why you receive calls and emails to invest that money now.

Cash is ok, especially when you aren't comfortable buying into the market.  

Sure cash pays virtually nothing these days but its better than losing and there is something to be said for sleeping at night.  I remember telling clients that if they are losing sleep that they own too much stuff.

1 comment:

  1. Exactly right. I have been investing for decades and a certain amount of cash, 20-30% has always made me feel more comfortable.