# How much cash position?



## mcoursd2006 (May 22, 2012)

Just curious how much cash you keep in your overall portfolio. My returns this year was dragged down a bit by having too much cash, ~10%, and with the new year, that position is going to increase due to the addition of new money for RRSP's, TFSA's, and RESP's. Weigh in please.


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## heyjude (May 16, 2009)

Currently 4.8% in "cash and cash equivalents" including a cash float within my equity portfolios. However, there have been times I've had significantly more, such as shortly after receiving an inheritance and after the sale of my house, or when preparing for a major purchase, but only for a short time, e.g. a week. With the mediocre returns on fixed income in recent years, there is no incentive to put money there over and above one's fixed income allocation. So in part of my RRSP and TFSA I am using ladders of 5 year nonredeemable CDs, which preserves some liquidity and gets a better interest rate than a HISA. At this point, many of the highest rate CDs (which had terms of up to 4.5%) have matured and it is difficult nowadays to get more than 3% for a five year CD. My goal is to have a CD or several maturing every year that will cover basic expenses, at least for the first 4-5 years of retirement, so that I am not hostage to withdrawing from equities at market lows. I keep most of the actual cash in a HISA and "feed" it to my checking account monthly to cover expenses. Ability to monitor balances electronically is conducive to efficient cash flow. It must have been a real pain to do this in the paper era.


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## Synergy (Mar 18, 2013)

Too much, currently around 30%. Plus the recent TFSA contribution which is stting in cash. Took some profits in 2013. Will be looking to deploy about 10-15% into the equity market this year. May add the rest to my fixed income allocation. I hold no bonds and only a small allocation to fixed income (HISA/GIC) so I don't mind hanging on to a little extra cash.


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## Dave (Apr 5, 2009)

Roughly 50% cash and 50% equities right now. I was keeping so much liquidity with the possibility of buying real estate in mind. My goal is to get down to 10% cash.

Dave


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## mcoursd2006 (May 22, 2012)

I was around 25% a few years ago, but have whittled it down to 10. I am comfortable at this level, so i guess i should be happy with this rate of return.


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## Eder (Feb 16, 2011)

4% for the last 3 months but will start (already started) selling some winners with the goal of 20% cash by April. With this market it's not real hard to find some winners in the portfolio...wonder how active the XIRR thread will be when we drop to 12000?


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## mrPPincer (Nov 21, 2011)

32.5% as of closing yesterday, planning to increase that by another 6% or so if equities go up some more.

Right now I think we're seeing a tiny bit of a new year's correction in equities due to some capital gains selling that some people have been waiting until 2014 for, but it's also RSP season so there should also be an inflow into equities coming, though I don't really know if either of those two things have all that much of an effect.


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## birdman (Feb 12, 2013)

Approximate numbers:

Cash & Term deposits 50%
MIC's (cashable anytime 17%
Sundry (private loans, gold, etc) 7%
TOTAL 74%

On a pullback I may reduce my cash by around 5 - 10%.
Yes, I'm conservative but also my wife & I are in our mid + 60's


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## Jon_Snow (May 20, 2009)

Generally try to keep 100k in cash handy... So right now around 10% of investable assets.


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## Greyhound86 (Feb 21, 2010)

Way too much. 30% at Dec 31 and a bunch of new cash coming in January which will bring cash up to 60%.


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## MoreMiles (Apr 20, 2011)

If you have high income, then you are already rich. You cannot be rich twice... So your lifestyle will not be different if you in stay 100% in cash if you have over 10 million. You don't need any investment risk. 

For those who have not made it there yet, you have to take equity risk to live comfortably. 

So asking someone how much cash they need to invest is kind of meaningless in my opinion. 

If I have 50 million dollars from Loto Max, I would put in all in GIC cash. I can still retire right away despite 100% cash. You see my point?


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## Greyhound86 (Feb 21, 2010)

MoreMiles said:


> If you have high income, then you are already rich. You cannot be rich twice... So your lifestyle will not be different if you in stay 100% in cash if you have over 10 million. You don't need any investment risk.
> 
> For those who have not made it there yet, you have to take equity risk to live comfortably.
> 
> ...


You are probably right. No need to fret, lose sleep and spend all your time worrying about your investments if you have more than enough assets and income to live in luxury/comfort now.


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## donald (Apr 18, 2011)

What about the game though?weather it be businesses/stocks/re ect.
If your rich already(8 figures,and already have your needs or the material items have run their course,i can't see much satisfaction in just collecting interest)
If your a multi-millionaire and you got there from hard work/intelligence/competitive/a high need of personal achievement chances are high your going to seek out contentious life long challenges,otherwise i would beg to differ you wouldn't wind up that wealthy to begin with.
People are people and just because one has more zero's doesn't change one's desires of wanting more.....could be wrong though!I bet high net worth advisors would confirm this(they are prob even more intense and demanding than the average multi thousandaire/millionaire)compounding money i bet in large amts is likely very intoxicating.


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## GoldStone (Mar 6, 2011)

Asking how much cash is meaningless for many other reasons, not related to how rich you are. Age, investment strategy, asset allocation, etc all play a role.

Suppose I tell you I have 0% cash. Does it mean that I'm super-bullish on equities? Absolutely not. I might be 75% equities, 25% bonds ... or 25% equities, 75% bonds ... or whatever.


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## Dave (Apr 5, 2009)

I have crossed the treshold of 1M investable assets last year. The reason why I invest in equities is that my savings will loose roughly half of their value due to inflation within 20 years. I see inflation as much as a risk as stock market volatility. However, I do not fret about the exact % invested or beating the benchmarks at all cost. The goal is wealth preservation.

About the lotto winner comments, an interesting anecdote about the super rich... Somebody found out that Suze Orman, the TV famous super financial advisor, has only 4% of her 25 million dollar liquid net worth is in the stock market because ''if I loose a million dollars, I do not care.'' Talk about preaching one thing and doing another...

Here is the link...
http://www.marketwatch.com/story/outing-suze-ormans-investment-portfolio

Dave


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## richard (Jun 20, 2013)

Dave said:


> About the lotto winner comments, an interesting anecdote about the super rich... Somebody found out that Suze Orman, the TV famous super financial advisor, has only 4% of her 25 million dollar liquid net worth is in the stock market because ''if I loose a million dollars, I do not care.'' Talk about preaching one thing and doing another...
> 
> Here is the link...
> http://www.marketwatch.com/story/outing-suze-ormans-investment-portfolio
> ...


That's completely reasonable. If her TV show was aimed at multi-millionaires she would have to change her advice as she clearly knows. For ordinary people there are a lot of benefits to behaving differently. I know that a portfolio that can pay my bills will need to have a large amount in stocks, so I'm filling up the stock "bucket" first since it will benefit the most from being invested for a long time. Until that gets closer to its final value (or yields improve by a multiple) I don't want any bonds, and the only cash I have is dividends that were too small to re-invest.


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## Cal (Jun 17, 2009)

It kind of varies due to market conditions....today I am probably 1% in cash, but will build it up unless a good buying opportunity presents itself.


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## Canadian (Sep 19, 2013)

Dave said:


> About the lotto winner comments, an interesting anecdote about the super rich... Somebody found out that Suze Orman, the TV famous super financial advisor, has only 4% of her 25 million dollar liquid net worth is in the stock market because ''if I loose a million dollars, I do not care.'' Talk about preaching one thing and doing another...


That's because she doesn't need to have much of her net worth in the stock market. When you have a large sum like $25 million the name of the game is capital preservation, not accumulation [unless you're determined to build yourself a massive net worth empire]. The remaining $24 million could generate over $200k per year in interest just by sitting in a savings account or in GICs. If I had that kind of capital I would gladly move my money into fixed income or interest-bearing cash. Unfortunately I don't, so I am fully invested.

I get your point "preaching one thing and doing another," but I wouldn't necessarily call it hypocritical. The advice she provides is suitable for her viewers because they are in much different financial positions from her.


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## Nemo2 (Mar 1, 2012)

Canadian said:


> I get your point "preaching one thing and doing another," but I wouldn't necessarily call it hypocritical. She advice she provides is suitable for her viewers because they are in much different financial positions from her.


The very few times I've seen her, (we don't have cable/satellite, or watch TV at home), it seems to me that she's not pushing equities, but rather assisting viewers with common sense suggestions pertaining to their own individual situations, (as you note).


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## OnlyMyOpinion (Sep 1, 2013)

protomok raised a good point on another thread re/ having some kind of FI position even if you have a DB pension - to essentially 'keep some powder dry' for buying opportunities in the event of a major market correction. 
I'm bumping this older thread to ask, are you:
i) Building your cash position these days and waiting for a 'correction' (could be incoming savings or selling)
ii) Staying fully invested as opportinuties arise and don't 'play' corrections (cash not readily available)?



protomok said:


> Even for folks with gold plated govt pensions I still think they should have a position in FI. Without a FI position you will have to also be OK with sitting on the sidelines in times like 2009 or 2011 when you could have instead been picking up bargains in equities. The FI doesn't have to be bonds, it could cash, HISA, redeemable GIC, it could be considered a "safety cushion", whatever, it just needs to be available in the case of a market correction. Maybe some would call this market timing, but IMO if I'm a long term investor and I see a stock well below my avg purchase price, why not jump on it?


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## lonewolf (Jun 12, 2012)

When there is fear & more cash on the side lines it is better to do the opposite of everyone else & have less cash on the side lines. When there is little cash on the side lines it is better to have more cash on the side lines.

Mutual fund cash levels above 11% have occurred @ major bottoms i.e., 74, 82, 90
Mutual fund cash levels below 4.5% @ major highs i.e., 73, 76, 2000, 2007

There are a number of ways these numbers could be used to determine cash levels i.e., for every percent of cash held by mutual funds the investor could multiply the number by 9, if mutual funds held 11% cash they would be 99% invested, If mutual funds had 4.5% cash levels then the investor would have more cash sitting on the side lines. Would have to do some digging to find mutual fund cash levels. There are all kinds of ways to do it some might use ratio of money in bull/bear funds using Rydex funds for cash allocations.


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## My Own Advisor (Sep 24, 2012)

Other than emergency fund in savings account, maybe up to $5,000 across all investment accounts. Otherwise fully invested.


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## OnlyMyOpinion (Sep 1, 2013)

Looks like about 40% FI across all of our assets, but have no DB pension and likely to start drawing upon it in <5yrs, so comfortable with that.
About 3% of equity trading acc is in short term cash waiting for a home. Equities all drip and are generally 2-3x acb so not in a real hurry to put new money into them at this time and 'average up'. Also may have an external need for the cash that needs to sort itself out.


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