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Old 01-29-2016, 08:03 AM   #41
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I calculate that if investments are held at no or low risk and can be converted to cash with little or no penalty, it is just as good as cash.
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Old 01-29-2016, 08:18 AM   #42
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We never hold cash. Always fully invested.

For the retail investor, holding cash has been proven to be a losing strategy.
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Old 01-29-2016, 08:30 AM   #43
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Originally Posted by mrfeh View Post
We never hold cash. Always fully invested.

For the retail investor, holding cash has been proven to be a losing strategy.
That's right. You're better off 100% in small cap stocks over the long run - most of the time, that is.

Not too many retirees will take that approach, however, because once you are living off your investments, it's not only the long term that matters.
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Old 01-31-2016, 07:06 AM   #44
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This convinces me of the course I was about to take. 20% now in cash, over half of which I was going to put into CD ladders now that we sold our house and bought something for less than half the price. It represents 5 years of living expenses.


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Old 01-31-2016, 08:05 AM   #45
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Originally Posted by mrfeh View Post
We never hold cash. Always fully invested.



For the retail investor, holding cash has been proven to be a losing strategy.

Cash has held up pretty good so far this year!


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Old 01-31-2016, 08:08 AM   #46
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I don't think I am alone here but I am holding a larger position in cash as a bond proxy.


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Old 01-31-2016, 08:47 AM   #47
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I have about 15% in long-term CDs and no bonds. So my cash position is other people's bond position. I am slowly converting CDs into index funds when they mature.
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Old 01-31-2016, 10:45 AM   #48
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is anyone here considering bonds, or bond funds "cash"?
My STB fund @ VG is considered part of my cash reserves. I have held it 20 years or so however I have never had to tap into it.
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Old 01-31-2016, 10:59 AM   #49
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25% cash, 1/2 in mm paying 1%, 1/2 in 2.25% CDs, 6mo interest penalty for early WD, mms pays for 5-6 yrs expenses.


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Old 01-31-2016, 11:25 AM   #50
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About 10 percent is in mmf at Vanguard. We draw from that when necessary. Since DH started SS at FRA we haven't needed to draw from it--before then the cash was about five years' of expenses after pension and distributions, which we do take.

I really like reading people's different choices and their rationales for them--it has really been helpful over the years.
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Old 01-31-2016, 11:25 AM   #51
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My cash position pays no interest rate. I don't want the hassle to deal with it yet. My bond is G fund. Never have bond mutual funds, unless I buy directly and hold on the the bond, wait for it to mature.


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Old 01-31-2016, 12:08 PM   #52
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is anyone here considering bonds, or bond funds "cash"?
I count I-Bonds as cash since the principal is guaranteed but not regular bonds or bond funds.
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Old 02-02-2016, 05:45 AM   #53
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Had about 15% cash until recently, cut it down to 7% by buying more VG funds on the recent dip. Not yet retired by will be in April 2017!
General plan after FIRE is to keep 2-4 years of planned expenses in cash (with emergency fund etc.), or cash equivalent (I include CD's in this so probably 1-2 in cash and another 1-2 in CD's). It is the amount that makes me comfortable, and the wife more so and she is the primary shareholder in this company!
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Old 02-02-2016, 06:04 AM   #54
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I am actually higher than that at the moment, although it does leave me wanting to get back closer to my target allocation. I liquidated some holdings earlier this month that were using a sector rotation strategy that was underperforming and too costly expense wise, so will gradually redeploy the $s to some lower cost active and index funds as opportunities arise. I like to have a mix of both active and passive type investments. Anyone else holding much cash this year?
Unless you can be right 200% of the time (getting out and back in), you should have re-invested right away.

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For instance, if an investor stayed fully invested in the S&P 500 from 1995 through 2014, they would've had a 9.85% annualized return.

However, if trading resulted in them missing just the ten best days during that same period, then those annualized returns would collapse to 6.1%.
Cost Of Missing 10 Best Days In S&P 500 - Business Insider
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Old 02-02-2016, 07:45 AM   #55
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Now 8.1%, but will be 11.2% soon after dumping some real estate.
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Old 02-02-2016, 08:15 AM   #56
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9% cash which represents 4 years of expenses.
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Old 02-02-2016, 08:52 AM   #57
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Forgot to add that I'm considering Life Insurance cash value to be "cash" also. Two old whole life policies on me and one on DW. Not particularly large death benefits on any of these, but more than enough to handle final expenses. Had planned to cash them in after a few years of ER, as I thought it best to hang on to them for a few years just in case one of keeled over early into ER but we're both still kickin'.
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Old 02-02-2016, 10:29 AM   #58
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Unless you can be right 200% of the time (getting out and back in), you should have re-invested right away.
Agree, but could not do it instantaneously since I was transferring these sector funds from Wells Fargo to Fidelity, so I cashed out vs transferring in kind.
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Old 02-02-2016, 02:17 PM   #59
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About 20%. 6 years living expenses.
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Old 02-02-2016, 04:45 PM   #60
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I count I-Bonds as cash since the principal is guaranteed but not regular bonds or bond funds.
Weil then I have more cash. But I can't just go out and spend these Ibonds. Takes some time to liquidate and I'm locked in by the high rates they pay (old Ibonds). So I'll have to disagree on assigning them to cash.

We have maybe 1% cash right now. Today the market was bad. Tomorrow who knows. Certainly not El-Erian as the OP mentioned. If there is one "guru" I think is full of bull, it is that guy. He was wrong about a lot of stuff in the past. Just read is book which is bunk. Now that I said that, he's going to be right this time.

P.S. There are only intelligent observations. There are no gurus.
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