There is a saying in
investing that "cash is trash", because cash provides such low
returns and loses value owing to inflation. Yet every investor has
to deal with cash in some
way and there is always
some role for cash within a portfolio. So how much of your net
worth should you have in cash? Why hold it? When should you
rebalance in and out of cash?
Harry Browne thought carefully about the role of cash with his
permanent portfolio strategy. His insights on cash are useful for
all investors, regardless of your particular approach. In this
episode I explain the role of cash in investing from a permanent
portfolio strategy perspective. As always, your money is your own
responsibility. I am not a financial advisor.