walkinwood
Thinks s/he gets paid by the post
Hello,
I hear a lot of people on the board say that they have a cash cushion of x number of years spending. The purpose being to draw down on the cushion instead of selling equities in down years.
I have a question for those who use a cash cushion. Is that cash considered part of your asset allocation? Or do treat it separately.
To be clear, let me give an example. If you have $1M, a cash cushion of 100K, 450K in bonds and 450K in equities, would you say you have an asset allocation of 50/50 (equities/bonds) or would you say 45/55 (Equities/Bonds+cash)?
Thanks.
I hear a lot of people on the board say that they have a cash cushion of x number of years spending. The purpose being to draw down on the cushion instead of selling equities in down years.
I have a question for those who use a cash cushion. Is that cash considered part of your asset allocation? Or do treat it separately.
To be clear, let me give an example. If you have $1M, a cash cushion of 100K, 450K in bonds and 450K in equities, would you say you have an asset allocation of 50/50 (equities/bonds) or would you say 45/55 (Equities/Bonds+cash)?
Thanks.