Increasing cash in your portfolio is one of the simplest ways to protect yourself from a stock market crash. But how much cash should you have? Today we answer that question. Subscribe here for more content: http://bit.ly/SubscribeMichaelJay
We discuss several important considerations on cash to help you determine an appropriate allocation for you. In addition we share example cash allocations and suggestions from funds, investors, and myself. Understand that how much cash you hold is a personal decision based on your financial situation and risk tolerance. However, by the end of this video you should have a greater perspective on cash and its role in a portfolio.
Understanding the role of cash in a portfolio
01:06 Historical returns of cash
02:06 Cash and inflation
03:14 Why hold cash?
03:34 Limit downside risk (risk/return comparison)
04:54 Take advantage of opportunities (Google example)
05:46 When to use cash (rebalancing)
07:02 Value of cash at market peak/bottom
07:39 Why your savings rate is so important
08:33 Where should you hold your cash?
Real world cash allocation examples
09:24 Cash/bond allocation in target-date retirement funds
10:34 Benjamin Graham recommended allocation
12:10 Warren Buffett portfolio and cash holdings
14:15 My personal portfolio allocation to cash
10:39 You can get a copy of The Intelligent Investor by Benjamin Graham here: https://amzn.to/2RwvD47 (If I had to recommend one investment book, this would be it.)
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DISCLAIMER: This video is a resource for educational and general informational purposes and does not constitute actual financial advice. No one should make any investment decision without first consulting his or her own financial advisor and/or conducting his or her own research and due diligence. There is no guarantee or other promise as to any results that may be obtained from using this content. Investing of any kind involves risk and your investments may lose value.
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