When Cash is King

[youbet]

From Wikipedia:

In economics, cash (/kæʃ/ (About this soundlisten) kash,[1] or /ˈkeɪʃ/ kaysh in AuE) is money in the physical form of currency, such as banknotes and coins.

In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately (as in the case of money market accounts). Cash is seen either as a reserve for payments, in case of a structural or incidental negative cash flow or as a way to avoid a downturn on financial markets.

 

[RenoJay]

Below quote from the article is my favorite. This is why many have a balance of stock/bond/cash portfolio
"...the most spectacular returns are often earned in the first few days or weeks following a market bottom. She also has a large balanced portfolio, with a large amount of stocks that have benefited from high long-term returns, and also enough cash to sleep like a baby when things look the worst."

The hard part is calling the bottom. I called it about five times in the fall of 2008 and eventually nailed it in March 2009. But my confidence was shaken by March (having watched each of my previous “bottoms” get taken out) so by the time the real bottom was in, I didn’t invest a huge amount. I think we can all agree that investing huge sums at the bottom is great. Getting the timing exactly right is very challenging.

 

[NW-Bound]

The hard part is calling the bottom. I called it about five times in the fall of 2008 and eventually nailed it in March 2009. But my confidence was shaken by March (having watched each of my previous “bottoms” get taken out) so by the time the real bottom was in, I didn’t invest a huge amount. I think we can all agree that investing huge sums at the bottom is great. Getting the timing exactly right is very challenging.

Right.

As long as I beat the "buy and hold" practice, no matter by how much, I call myself successful.

If you trail the "buy and hold" approach by getting out too early, and this can easily happen, well, that's no good.