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5 reasons why cash is king [ just curious what is ur cash % holding?]
As of my most recent Xray which includes liquid cash (about 15%) held within my portfolio plus the cash that my mutual fund managers are holding (about 5%) equals about 20%. I have recently spent some but I have also had some fund distributions that have also paid to the cash area. With this, I feel, 20% is still a good number.
Raw figure (with DODIX included) = 23.5%, slightly above normal. That's a bit deceptive, since it doesn't include cash held by managers of allocation type funds. Without doing a M* X-Ray, I'll guess the true cash component at about 30%, a bit higher if you include the short term bonds those funds hold.
Of course this discussion only makes sense in context. (conservative old **** many years into retirement.)
Some here are referring to "cash equivalents" with words such as "TIPS, and related bonds [?]" and "low duration bond funds." Fascinating!! Please, describe for me, what could you possibly have used as your detour point to take you down this perditious road of reasoning, to this happy place of delusion?
Experience has taught me I am not good at market timing. So, I mostly let fund managers do this for me. My major fund holdings with substantial cash positions include FPACX, FPIVX, ICMBX, ARIVX, YAFFX, WEMMX, COBYX, and BERIX. The fund analyzing tool I use tells me my portfolio currently has 18% allocated to cash/near cash, with most of that coming from these holdings. I also have 6 % of my portfolio set aside in funds including RPHYX and MWCRX for use if there is a MAJOR (maybe 35% or more) decline in the stock market. I would be comfortable selling those two holdings with some loss in that situation. So, all told, I have about 25% of my portfolio currently waiting for a better time to invest in more volatile stuff. I also have just over 50% currently invested in the stock market and the remaining 25% in bond funds including OSTIX and RSIVX. The bond funds presently mostly tend towards short term and high yield.
@heezlsafe - no delusion here. That's just part of my overall approach to allow up to 50% DODIX in the most conservative portion. (On my spread-sheet it's labeled "AA" - signifying approximate credit quality). You are correct, however, that an intermediate term bond fund behaves quite differently than cash.
If you require cash only, it's about half the cited number or 12%. I hope you don't mind that the ultra-short term bond fund TRBUX is included in that. If we knock that out too - geez don't know --- probably less than 5% cash consisting of various money market funds and FDIC insured bank accounts.
@Tampabay Ha, hammer to nail, that's probably it, plus (I would add) an almost resolute belief that 2008-2009 never ever happened.
But to stay true to JohnN's post, several months ago I started to feel uncomfortable and, in step with what older wily veterans have already posted here, I did some trimming and took some gains from my stock funds. Hardest step is the first one; several weeks later, I realized that that had felt pretty good and sold a few shares here and there in stocks that had become overvalued. This brought cash to around 10%. If the 10yr T goes on down to between 2.25% and 2%, I'll be giving a trim to some fixed income, bringing cash up to circa 12.5%. Combined with cash held in mutual funds (some are rather defensively elevated right now), total cash I figure will be about 15%.
You noted: "Some here are referring to "cash equivalents" with words such as "TIPS, and related bonds [?]" and "low duration bond funds." Fascinating!! Please, describe for me, what could you possibly have used as your detour point to take you down this perditious road of reasoning, to this happy place of delusion?"
Okay, so in theory; down the road to investing hell............
The first week of February found me standing in front of the Mutual Fund Roadhouse Cafe. Bingo! Sell our small cap holdings was the thought. Sure enough the holdings were sold. But the money was not going to be parked in a traditional money market fund to which we have access; as the E.R. and yield of such areas is already negative and worse when factoring inflation. So our "cash" moves to investment grade bonds, be they gov't. or corp.
Eventually, these monies were moved to PRHSX, FSPHX and later to GPROX.
Our cash parking (since 2009) is not cash as in MM funds; and likely won't be for many years, if then.
There may already be enough "cash" among the managed holdings; so I won't add more to the pile.
Comments
Cash equivalent = TIPS and related investment grade bonds.
As of my most recent Xray which includes liquid cash (about 15%) held within my portfolio plus the cash that my mutual fund managers are holding (about 5%) equals about 20%. I have recently spent some but I have also had some fund distributions that have also paid to the cash area. With this, I feel, 20% is still a good number.
Old_Skeet
Of course this discussion only makes sense in context. (conservative old **** many years into retirement.)
Money Market Funds: 0.73%
Stocks: 74.34%
Fixed-Income: 13.59%
Mutual Funds: 11.32% (Equity Funds)
If you require cash only, it's about half the cited number or 12%. I hope you don't mind that the ultra-short term bond fund TRBUX is included in that. If we knock that out too - geez don't know --- probably less than 5% cash consisting of various money market funds and FDIC insured bank accounts.
But to stay true to JohnN's post, several months ago I started to feel uncomfortable and, in step with what older wily veterans have already posted here, I did some trimming and took some gains from my stock funds. Hardest step is the first one; several weeks later, I realized that that had felt pretty good and sold a few shares here and there in stocks that had become overvalued. This brought cash to around 10%. If the 10yr T goes on down to between 2.25% and 2%, I'll be giving a trim to some fixed income, bringing cash up to circa 12.5%. Combined with cash held in mutual funds (some are rather defensively elevated right now), total cash I figure will be about 15%.
You noted: "Some here are referring to "cash equivalents" with words such as "TIPS, and related bonds [?]" and "low duration bond funds." Fascinating!! Please, describe for me, what could you possibly have used as your detour point to take you down this perditious road of reasoning, to this happy place of delusion?"
Okay, so in theory; down the road to investing hell............
The first week of February found me standing in front of the Mutual Fund Roadhouse Cafe. Bingo! Sell our small cap holdings was the thought. Sure enough the holdings were sold. But the money was not going to be parked in a traditional money market fund to which we have access; as the E.R. and yield of such areas is already negative and worse when factoring inflation. So our "cash" moves to investment grade bonds, be they gov't. or corp.
Eventually, these monies were moved to PRHSX, FSPHX and later to GPROX.
Our cash parking (since 2009) is not cash as in MM funds; and likely won't be for many years, if then.
There may already be enough "cash" among the managed holdings; so I won't add more to the pile.
Okay, past my pillow time for today.
Take care,
Catch