Broker Check

Why to Hold Cash

| July 03, 2013

The Lead Comment

​Many people forget that in very traditional, conservative asset allocation, “cash” and “cash equivalents constitute an asset class – meaning one of the investments you could hold. Here’s why:

“Cash” does not go down in nominal value – or – let’s say in its Money Market variation – very little.

When other investments are going down, at some point, they represent a buying opportunity. If you are holding cash, then you have the ability to buy “opportunistically,” when prices have gone down and might represent a better value than previously.

As in all situations, consult your own Financial Professional!!

The How-To Articles

Social Security – Call It ‘Married With Benefits’ . . . . Wall St Journal

GMO’s Montier on Why to Hold Cash . . . .


“Right now, you do not want to be fully invested,” Montier said. “You need to have something with cash that will allow you not only to worry about today’s constrained opportunities set but also take advantage of tomorrow’s opportunities, three months’ or two years’

“In the immortal words of Winnie the Pooh, ‘Never underestimate the value of doing nothing.’”

Other Reads

How Caffeine Can Cramp Creativity. . . . . New Yorker

Don’t Count on Calorie Counts . . . . . New Yorker

Congress is less popular than lice, colonoscopies and Nickelback . . . . . Big Picture

Brookline Financial Advisor

If you’re looking for a Boston Metro Financial Advisor – or if you’re happy to work virtually – visit me at my Coolidge Corner office. Or call or email me anytime with your questions!

Investments in securities do not offer a fixed rate of return. Principal, yield and / or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. The views are those of Bruce Mazo and should not be construed as investment advice. All information is believed to be from reliable sources; however, we do not make any representation as to its completeness or accuracy. Investors cannot directly invest in indices. Past performance does not guarantee future results.