Poll: % Cash in Portfolio- Read first

[jebmke]

Excluding operating cash, zero. But our bond holdings do not have a long average duration and our asset allocation is 60% bonds - context matters.

[Cayman]

Count me as the 9th poster here who can't participate in the poll because it does not offer an option for cash reserves of 25% or more.

If you want an accurate poll, you'll need to provide an option for cash reserves of 25% or more. Heck, 2 stated that they are 100% in cash right now.

[street]

I'm 11% in cash. My thinking and thought on having cash (CD, MM, ETC.) is to live of off that money and not have to touch investments. I would be able to weather the storm in down turn in the markets for many year. Once I receive SS I would never have to touch my investments at all in my life time.

I will tap them at sometime but my goal is to generate my portfolio to death.

[ExNavy In STL]

I'm new at this, but my thinking is that I should keep at least a year's expenses. However, when you look at the average Bear Market trend of being something like "3.3 years for stocks to surpass their high set before the typical bear market began,” that may be too conservative.

My plan is to take out what I expect to need every Jan 1. This means if the bottom drops out in that year I am covered for that year. So, if I just keep a year out of the market I am really covered for (potentially) two - depending what part of the year the fall begins.

Ideally, if averages hold, I would think 3 years expenses in the bank would help get back to the last highest market position without having to liquidate highly discounted shares.

Many of us here are cautious gamblers who are not quite fat enough to fully hedge a 3-year bet. Meaning, my guess is many of us are riding this "bull" all the way to the pasture.

[audreyh1]

Folks who are worried about selling equities when they are down need to read a few papers. If your asset allocation contains enough fixed income, you will be selling bonds/cash to fund withdrawals, AND buying more equities from your fixed income.
https://www.kitces.com/blog/are-cash...lly-necessary/

I have a large cash position in my total assets, but it's not because I'm worried about selling equities when they are down. It's because in my opinion I already have enough invested in my retirement fund which funds my annual withdrawal. Plus some years my income will drop from the retirement fund. But I have enough in fixed income to rebalance, buy down equities, and also fund my annual withdrawals.

[MarieIG]

Estimate 2.5 % : probably about two and a half years of living expenses.

[Totoro]

Somewhere around 40% for me. It should actually be higher.

Thing is due to taxes and currency (EUR, not USD) I have 0% in bonds, CDs instead. And no real estate since I don't understand it enough, and most of it is overvalued anyway (yields <3% gross). So my only other category is equities.

[DrRoy]

Around 2%. I want my money earning something.

[traineeinvestor]

Currently about 8%.

We don't have any particular guidance beyond having about 2 years cash or equivalents available to ride out any disruptions to cash flows from rents/dividends. FWIW, we tend to view bonds with durations out to about 5 years as being close enough to cash as makes no difference.

[sengsational]

Quote:

Originally Posted by audreyh1 Some folks use their stable value fund as a bond substitute. If you have access to a stable value fund that pays as much interest as a short-term or intermediate-term bond fund, then using the stable value fund may make sense. You might not get the asset appreciation of a high quality bond fund when markets are stressed, but you are protected from interest rate and credit risk.

If bond rates come up, I'll probably move some of my allocation back, but it seemed like they weren't paying me enough to compensate for the interest rate risk, especially since the alternative (SVF) has been paying 3.4% to 3.6% the last few years. Probably not quite as good as some bond funds, but less risk.