Smart ways to put cash to work
How to balance security, opportunity, and growth in today’s market.
After years of low rates, cash finally feels rewarding again. But while higher savings and term deposit rates are appealing, holding too much cash for too long can mean missing out on long term growth.
Some investors hold cash to tactically allocate when shares are attractive. If they’ve been holding onto dry powder since the last downturn, they’ve been waiting a long time. They’ve also missed out on the ride to market highs.
This week, we explore how to make smarter decisions with your money, balancing the comfort of guaranteed returns with the opportunities that come from investing, cash as a standalone asset class.
Editorial insights
Unconventional wisdom: Three underappreciated benefits of cash. Morgan Housel’s new book has got Mark thinking.
In this piece, Mark LaMonica reflects on the often-overlooked virtues of holding cash, not as a substitute for investing, but as a strategic complement to it. He draws inspiration from Morgan Housel’s writing on creativity, patience, and the value of stepping back to think, rather than always ‘doing.’
Future Focus: The tax-free returns Aussies are taking advantage of. There are smart ways to take advantage of your offset account, but balance is the key.
New data shows that Aussies have sizeable offset accounts, on average, 11% of the loan limit. Is this the right amount? Shani runs through the framework she uses to decide what should and shouldn’t sit inside of her offset account.
What is the right amount of cash to hold in your portfolio? How should you decide on the appropriate level of cash to hold? We believe there are several points an investor should consider.
Cash is a very useful tool for investors within all portfolios, with utility that provides liquidity and capital protection. However, it has a long history of underperforming almost every other asset class. So, how does one decide on the appropriate level of cash to hold? When sizing, there are several points an investor should consider in the portfolio construction process.
With term deposit rates falling, bonds holding up but with risks attached, and stocks yielding comparatively paltry sums, finding decent income is becoming harder. James Gruber discusses how cash ETFs and bank savings stack up in an environment where many assets are under pressure for yield.
Is it worth venturing beyond cash and term deposits for steady income? This looks at the pros and cons of assets - including stocks, bonds, and hybrids - in providing yield and how they stack up against cash.
How much cash should you hold in retirement? A diversified portfolio with various time frames can help you meet your income needs during retirement.
