Anyone else hoarding cash right now?

[runner3081]

No, I don't market time.

All of the money that comes in is spoken for (except for about a $75 residual amount, per month).

[TomatoTomahto]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

Automatic investing is a real benefit of 401K participation. You might consider automating other accounts for periodic (monthly, quarterly) investing too.

Invest we must.

We have continued to max our 401k and backdoor Roth. However, as far as taxable, I’m not making new investments (other than moving from US Equities to International).

If we have too much cash, so be it. I prefer an overfunded Emergency Fund to one that falls short. We are not in the position to need capital appreciation to make it; I might feel differently if we were.

[eucalyptus]

OP, I don't believe society will collapse. But I have sold equities and am waiting. Equity markets are strong, real estate and collectibles markets carry on. Almost as if there will never be a reckoning for the worldwide economic devastation and political unrest.

Timing? No question. Do I have a crystal ball? No. It's a bet. Life is short.

And if I'm wrong - as I hope I will be - I still win.

[Escapevelocity]

We are holding more cash than usual, but I don't know that it's hoarding per se.

We have a tuition bill coming due, a huge tax bill due next April, and are planning to build a new house. So having cash is important, but it has nothing to do with the state of the market.

We are planning to do a cash-out refinance on our main house and maybe even a second home. That would move about $300K of equity from the house into cash. At these rates, we definitely want to do this.

What types of rates are you seeing on cash-out Refi?

[bighatnohorse]

Sort of. . .holding cash. . .I planned travel to Africa this year - but now can't go due to the vid.

Retirement mailbox money comes in monthly, we have no debts, live frugally

We don't need more equities or bonds.

In the event of societal collapse the most important thing will be my neighbors - and our ability to self organize.
Food and water - not gold and silver.

[TheTimeLord]

No, I have been doing pretty much the opposite of hoarding cash since late March.

[H-Town]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

VTI price increased 46% since the lowest point in March. It seems like you missed a good run-up by deviating from boglehead's philosophy.

Now let's say when you put all cash in VTI, the market will crash 50%. Not only you missed the 46% run up, your stock portfolio will be also cut in half. Double whammy.

My point is: stick to boglehead's investment philosophy, rain or shine. You probably don't see it yet. But when you do, you will appreciate how simple and effective boglehead's investment philosophy is.

Your second paragraph has me confused. Are you arguing against the OP putting their cash into the market?

It's neither. I'm not arguing for or against OP putting cash into the market.

I'm arguing for sticking to boglehead's investment philosophy. If you follow it, you won't have any issues generated from market timing.

[Kenkat]

There’s societal collapse aka MadMax, Walking Dead, The Road, etc. Those require food, water and firepower. Gold of no value.

Then there’s societal reboot - revolution, war, etc. Society itself is still intact but all the rules are changed. Think Russian Revolution, Invasion of France 1940, Sound of Music, Dr. Zhivago, etc. Gold and silver could be quite useful; guns and ammo less so.

[Soon2BXProgrammer]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

More then a few people I know realized they where not wearing a swimming suit and the tide went out. What do i mean by this? They had 3ish months of an emergency fund, now they realize they would want a years cash. So they are not saving outside of their retirement accounts until they have the liquidity they want.

So is this hoarding cash? Maybe so.. but it is an adjustment of their plan based on the risks they want to mitigate based on having liquidity.

Now.. once they past a year's spending in cash... and they want to keep stock piling cash, i'll call it stockpiling then.

[gasman]

given the shape of the yield curve, I converted lots of my bonds to cash. If that meets your definition of hoarding.

[Chuck]

There’s societal collapse aka MadMax, Walking Dead, The Road, etc. Those require food, water and firepower. Gold of no value.

Then there’s societal reboot - revolution, war, etc. Society itself is still intact but all the rules are changed. Think Russian Revolution, Invasion of France 1940, Sound of Music, Dr. Zhivago, etc. Gold and silver could be quite useful; guns and ammo less so.

I saw a comment long ago on this forum about using silver bullets. That way it doesn't matter if precious metals or ammo are more valuable.

[airborne]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

Is it just society collapsing, or are you worried about a more acute issue such as total income loss?

I am hoarding cash right now, but not because I am afraid of society collapsing. I came into the pandemic crisis with about 12 months of expenses in an emergency fund. Now that is up to about 16 months and I am trying to get to 24-26 months ASAP as I am increasingly concerned about losing employment in early 2021.

I haven't cut back on retirement contributions (backdoor Roth was fully funded in January, and I've actually increased my 401(k) contributions as I am going to end up in a higher tax bracket than anticipated). But I did halt the extra payments on my student loan (very easily put into forbearance after job loss) and contributions to my brokerage account.

Every extra cent is going to savings in the event of job loss. If I am fortunately enough keep my job, once it appears we are in the clear I'll take the cash in excess of my 12-month EF, pay off the student loan and put the rest into my brokerage.

Anyone care to critique my strategy?

But no, if you're worried about society collapsing I don't think hoarding cash is the way to mitigate that threat.

[tonyclifton]

Not hoarding but trying add cash and use cash wisely...Worked to reduce expenses and increase the emergency fund starting in March. Ended up with about 14 months of expenses and the market recovered. The "hoard" is sitting in low yield savings and low yield money market funds. Recently made adjustments with some of the "extra" cash:

• Refinanced mortgage. Extra cash paid the closing costs. Chopped two years off the mortgage and paying $50 less per month. Very good return on the cash.

• Made full Roth IRA contributions in lump sum instead of each month. IRA contributions can be used in an emergency with no penalty. Longer time in the market and lower monthly cash needs.

• Stopped escrow of property taxes. Used "mental accounting" to set aside these funds which will be needed in January 2021.

• Using "mental accounting" to pay for a bathroom renovation and Summer 2021 vacation that were both planned for Summer 2020 and cancelled.

I think these are good uses of the "hoard" and several reduced monthly cash flow needs which can then be added back to the "hoard." It also made a coronavirus related wage reduction sting a little less.

[Valuethinker]

The economy is terrible beyond anything I have seen before. But that's no reason to sell stocks, is it?

I don't remember 1973 that well, but I do remember my parents being worried. Lineups for gasoline, wage-price controls etc. I do remember 1979-80 (Iranian oil crisis) and that was not pretty, nor the 1981 recession which accompanied Paul Volker's anti-inflation policies.

In the UK, unemployment in the early-mid 80s was higher than it is right now (with a furlough scheme still in place) due to collapse of traditional industries in the Midlands and North. 3 million unemployed then, on a population probably 1/5th smaller.

Britain also managed the 3 Day Week (coal miners strike leading to power cuts). 20%+ inflation. Stock market fell c 80% in real terms over 18 months.

It is a recession if your neighbour loses his job, and a depression if you do. Maybe the depression has not hit me yet?

[Krista]

Yeah, I did the same, though I sold everything but my 401k before the March crash happened (and I've continued adding to it) so I didn't lose out quite as much as I would have if I sold after. I keep thinking it seems to be a near certainty that there will be another large dip, similar to March, anytime now... and then I'll get back in with those funds, but it hasn't happened yet. I'm thinking about saying the heck with it and may start slowly averaging back in.

[TomatoTomahto]

I’m not hoarding cash, that’s a market timer move <shudder>; I’m just increasing the safe portion of my Liability Matching Portfolio

[dogagility]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

My suggestion: stop watching the "news".

[texasfight]

I hold absolutely zero cash.

People who have been risk averse have been slaughtered the past decade vs. asset price inflation.

The future is persistent low or negative real real yields. Get ready for 100x P/E multiples on nasdaq 100 ETF's in a matter of years.

https://twitter.com/TFMetals/status/129 ... 35426?s=20

[firebirdparts]

I am not hoarding cash. I admit being somewhat "conservatively" invested and being glad that I am. The gladness is the market timing part of it. When I hit age 50 I started trying to build up a bond portfolio, and I happened to evolve to a stopping point of like 50/50. You get to rebalance a lot if you have 50/50 and we certainly had our chance in the spring.

[Badger97]

We are holding more cash than usual, but I don't know that it's hoarding per se.

We have a tuition bill coming due, a huge tax bill due next April, and are planning to build a new house. So having cash is important, but it has nothing to do with the state of the market.

We are planning to do a cash-out refinance on our main house and maybe even a second home. That would move about $300K of equity from the house into cash. At these rates, we definitely want to do this.

What types of rates are you seeing on cash-out Refi?

2.75% for 30 years at 80% LTV with $1100 costs.

[MathWizard]

No not really.

I have beefed up my Emergency Fund to about 18 months of expenses, mostly because

• I am filling up tax advantaged accounts,

• I am near retirement, and

• will live on some of those funds while I do ROTH conversions before claiming SS benefits.

[mickeyd]

I am retired. I am about 7 years of expenses in cash. This loot is spread out in a CD @ NFCU, PMMF, and VG STB fund. Due to my current income stream vs expenses, I do not have an immediate need for this cash, but do not wish to invest in more equities as it will throw off my 45/45/10 mix.

[Wanderingwheelz]

I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool

I never understand why people think gold is valuable if society collapses. It's not like you can eat it.

Clang is currently unemployed too. I wish him the best, regardless, but to have 2 years of expenses set aside and to be buying precious metals with unemployment insurance seems risky to me.

If it were me I’d be fortifying my emergency fund each month if I had free cash after my enhanced UI.

Wanderingwheelz,

I have 2 years of CASH, 10 years of bonds, and 15 years in the stock. To achieve further diversification, I need to buy more gold/silver.

My annual expense is about 60K per year. The maximum unemployment benefit without the Federal enhancement and extension is only about 10K.

KlangFool

You do not need to buy gold and silver to achieve diversification if you have a typical assortment of stocks, bonds and real estate? The trendy thing to do right now is accumulate gold and silver, I get it. Maybe not as trendy as buying bitcoin, but trendy nonetheless.

If you’re receiving $10K in income, but you’re expenses are $60K, and your prospects for employment are questionable, why would you be investing in anything longer-term? Are you selling stocks to buy the gold and silver?

[pasadena]

I'm increasing my emergency fund, so I guess the answer is yes. Right now I have a little more than 5 months of normal expenses in VMMXX - still a little low for comfort. I'm not sure what that comfortable level actually is.

The goal is to be able to withstand a job loss for a reasonable amount of time and/or allow me to move and/or, worst case scenario, go back to my home country.

On the other hand, I sped up contributions to my retirements accounts (401(k) maxed out in May, now working on Mega Backdoor, which I expect to be done by mid-September. HSA on the way to be maxed out in December) so it's been a little slow, but I expect a bigger influx of money in the last quarter after the Mega Backdoor is done.

[KlangFool]

I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool

I never understand why people think gold is valuable if society collapses. It's not like you can eat it.

Clang is currently unemployed too. I wish him the best, regardless, but to have 2 years of expenses set aside and to be buying precious metals with unemployment insurance seems risky to me.

If it were me I’d be fortifying my emergency fund each month if I had free cash after my enhanced UI.

Wanderingwheelz,

I have 2 years of CASH, 10 years of bonds, and 15 years in the stock. To achieve further diversification, I need to buy more gold/silver.

My annual expense is about 60K per year. The maximum unemployment benefit without the Federal enhancement and extension is only about 10K.

KlangFool

You do not need to buy gold and silver to achieve diversification if you have a typical assortment of stocks, bonds and real estate? The trendy thing to do right now is accumulate gold and silver, I get it. Maybe not as trendy as buying bitcoin, but trendy nonetheless.

If you’re receiving $10K in income, but you’re expenses are $60K, and your prospects for employment are questionable, why would you be investing in anything longer-term? Are you selling stocks to buy the gold and silver?

Wanderingwheelz,

<< The trendy thing to do right now is accumulate gold and silver, I get it. >>

Not in my case. I am from the culture where we always keep some physical gold jewelry.

<<If you’re receiving $10K in income, but you’re expenses are $60K, and your prospects for employment are questionable, why would you be investing in anything longer-term? Are you selling stocks to buy the gold and silver?>>

1) I am retiring. I am 50+. My portfolio is big enough to bridge me until 67 years old and beyond.

2) No. I am not selling the stock to buy the gold and silver at this moment.

3) The gold/silver is protecting myself against short-term hyperinflation.

<<You do not need to buy gold and silver to achieve diversification if you have a typical assortment of stocks, bonds and real estate?>>

I disagreed.

KlangFool

[wolf359]

I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool

I never understand why people think gold is valuable if society collapses. It's not like you can eat it.

egrets,

Why do you assume that folks that have gold do not store up foods and water too? It is obvious to me that you are not prepared and never think about this kind of stuff.

KlangFool

KlangFool, the gold haters who believe that gold is worthless also believe that everything of value will be stolen if/when law and order breaks down, so there is no point in stocking up on food or water or anything.

Society can have supply chain problems well short of outright collapse. COVID has been disrupting food production, particularly meat processing. There is a hurricane currently off the East Coast. These things can coincide in a way that creates temporary disruptions in food, electricity, and water. Having some food and water and other emergency supplies stashed away well in advance can help you get through these shortages.

Just like being frugal can help financial independence by reducing the amount of money you need to survive, setting some supplies aside and growing some of your own food or being able to purify some of your own water can reduce the amount you need if those disruptions occur.

[RetiredAL]

Sort of! Not for hoarding, but as advanced placement. I did not want to get caught short by any short-term interruptions.

I am retired and living off of my withdrawals from my IRAs. They had been monthly. In March, I withdrew the remainder of this year's withdrawal amount to my checking.

Similarly, since my Dad is in Assisted Living being paid for by LTC insurance, I withdrew 9 month's from his fixed income into his checking account in case something happened with the payouts.

In hindsight, the only disruption has been that the inside of our bank branch was closed for several weeks, but i seldomly went in.

I do not keep "finger-tip cash" in a separate bucket, it's all part of cash/fixed-income/bonds, mostly at at brokerages, generally available to checking in 2 days. My checking usually has at it's lowest enough for another 30 days of expenses in it. I use CC for for most expenses, so I have plenty of time to react.

[wolf359]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

If you find that you didn't save enough in your emergency fund, then rebuilding the cash position is reasonable.

However, if you have a sufficient emergency fund, and you are simply saving cash because you're anticipating the market will collapse from here, you're simply market timing.

[Silverado]

Yeah, I did the same, though I sold everything but my 401k before the March crash happened (and I've continued adding to it) so I didn't lose out quite as much as I would have if I sold after. I keep thinking it seems to be a near certainty that there will be another large dip, similar to March, anytime now... and then I'll get back in with those funds, but it hasn't happened yet. I'm thinking about saying the heck with it and may start slowly averaging back in.

So, the taxman will be glad to see you next April? Or do you only have a couple grand that was in a taxable account? Anyone who is remotely close to retirement, who has been adding to a taxable account for a couple decades likely has a couple more zeros on the account balance and would unnecessarily be paying taxes. If you are a long way from retirement, there is no reason to do anything but pour as much money as possible into their accounts.

[Third Son]

I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.

If society collapses, money won't be worth anything anyway.

[Vettepilot]

I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool

I never understand why people think gold is valuable if society collapses. It's not like you can eat it.

egrets,

Why do you assume that folks that have gold do not store up foods and water too? It is obvious to me that you are not prepared and never think about this kind of stuff.

KlangFool

It is obvious to me that you are wrong. I am prepared with many types of supplies. Useless gold is not among them. I am still waiting to hear why you think it is useful in a social collapse.

egrets,

Why do you assume that I am using gold in the places where the society collapses? The gold/silver is used to get out of places before it collapses.

<<I am prepared with many types of supplies.>>

Then, why do you assume that folks with gold need to use them to exchange for food/water? If you can be prepared without gold/silver, the folks with gold/silver should have food/water too.

KlangFool

Anyone interested in what types of items have value in a real societal collapse should read Selco Begovic's book "The Dark Secrets of SHTF Survival". It's an extremely interesting read and contains a lot of counter-intuitive (and terrifying) advice from Selco's experience surviving the Yugoslav civil war.

[SquirrelEater]

I once was. Physical cash too (Incase bank systems down. Debt/credit systems)
Having a bit of prepper interests I already had supplies like food and toiletries before it was cool. So no need to turn savings into supply. Didn’t realize that till recently. Only debt is a mortgage is a LCOL area (atm payments ~15-20% net). Significantly reduced what I need put aside in cash to feel safe. One paycheck provides a decent amount of security...Compared to most in America! My neighborhood will be foreclosed first so by then daddy government will save the day.
Last week I closed my online savings account. I won’t be opening another. All for FSKAX.
I most certainly feel like buying stocks now is setting myself up for being in the red for years come the next dip, but most likely the stock performance will likely perform better than any current fdic account past a 5-7 years timeframe. Feels like a choice of bad or worse. I choose bad which is buying high.
History shows me stocks are a better choice than dollars. Every old high got topped with a new high. Dollars are fiat. The Fed will print. Your local bank will print. Stuff is so valuable they don’t want your dollars... they want your impatience and consumption.
The day FSKAX(or similar) ain’t no good, or can’t get currency out of, is the day the dollar is likely no longer going to be. In such a world dollar liquidity is not important. Staying safe and fed will be.
If I knew stocks would tank soon again I’d sell all of it... but I don’t know.

Ultimately you got to do what you think is best for your household. Being in a situation to decide between hoarding dollars or investments is still a great posit to be in. Truely a first world problem... a good problem to have!

[flyingcows]

Personally, I feel more comfortable holding assets in the long term (equities, real estate, etc), I don't like holding cash or bonds.

That said, I don't have any debt and expenses are low

[rascott]

Cash is trash.

[FelixTheCat]

I've been shoving money in Total Stock. Market came back nicely.

[Doctor Rhythm]

I stopped investing in my taxable back in March and can't bring myself to start again.

We’ve taken the opposite approach. Our cash reserves have increased slightly because there’s less opportunity to spend money (ie, vacations, restaurants, driving costs, entertainment, etc). We increased the automatic investment rate in our taxable account to “sop up” the extra cash that has accumulated. That being said, I’m privileged to be financially independent and have a recession-proof job.

Zero interest in prepping for social calamity, though.

[Krista]

Yeah, I did the same, though I sold everything but my 401k before the March crash happened (and I've continued adding to it) so I didn't lose out quite as much as I would have if I sold after. I keep thinking it seems to be a near certainty that there will be another large dip, similar to March, anytime now... and then I'll get back in with those funds, but it hasn't happened yet. I'm thinking about saying the heck with it and may start slowly averaging back in.

So, the taxman will be glad to see you next April? Or do you only have a couple grand that was in a taxable account? Anyone who is remotely close to retirement, who has been adding to a taxable account for a couple decades likely has a couple more zeros on the account balance and would unnecessarily be paying taxes. If you are a long way from retirement, there is no reason to do anything but pour as much money as possible into their accounts.

No, I had a pretty big loss on a bad stock pick last year (TEUM) so I have some time before I'll have to pay taxes again... I hadn't really gone very dep into brokerage acct investing and was just playing with some of my savings there. The rest that I sold were in a Roth and Rollover IRA.

So yeah, right now, I'm "market timing". Not a good strategy, generally, but the odds of a significant dip in the next few months are extremely high, IMO.

[Gordon303030]

Even online banks continue to reduce interest rates on savings accounts so cash is not a fun place to be.
But lots of risk in bond funds given the already low rates.

[hightower]

I freed up some cash back in March before the big crash. Then, about a month later I re-deployed those funds back into the market. I've been 100% invested since. I do think that the market is overly optimistic right now. As such, I re-balanced my portfolio yesterday back to my original 60-30-10 (stocks-bonds-cash). So, I now have cash reserves again to deploy if the market takes another plunge. I do think everyone should have at least some cash on hand. I don't think it's wise to be completely out of the market though because there are no guarantees which direction it will go.

[Dennisl]

Not hoarding cash, but I have been keeping more liquid assets. I have been less aggressively paying down mortgage and have been keeping more in short term bonds. My job is secure for the time being, but I have diversified with a side gig to increase cash flow. I’m tired, but sandwiches between an older and younger generation that is financially dependent on my income.can argue the merits of that and the mortgage pay down. Anyhow, it is what it is. I’m still investing 25% of gross income, but we have leaned down significantly. Slashed monthly costs from cable, gym, etc. mostly stopped eating out. We are in hunker down mode for the foreseeable future.

[hightower]

Cash is trash.

lol, I can't tell if you're serious, but during the next sustained downturn I want to hear you say that again and actually mean it. Cash is always king. Should you be 100% cash? No, obviously not, but to not keep any cash on hand is foolish.

[baconavocado]

Not raising cash, but I'm expecting increased market volatility this fall. Even in normal years October can be quite volatile and this year it's likely to be more so, IMO.

[MathWizard]

" I am old enough to remember the prime rate at 16%. My first mortgage was at 12% if I recall correctly."

My first mortgage was a conventional 30-year with 25% down in January, 1980. The rate was 12.75%. I was so happy to get it before the rates went up.

The high point was 16.32% in April. www.freddiemac.com/pmms/pmms30.html1982 October of 1982 saw a rate of 18.45%.

Yes, I was in grad school and got married right when this happened.
16% on our mobile home, 18% on car loan.

This certainly gave me a reason to hate debt.

Once out of grad school, paid off student loans, then took out a mortgage loan for current home, and never took on any other debt. Debt free is very liberating.

[nigel_ht]

OP, I don't believe society will collapse. But I have sold equities and am waiting. Equity markets are strong, real estate and collectibles markets carry on. Almost as if there will never be a reckoning for the worldwide economic devastation and political unrest.

Timing? No question. Do I have a crystal ball? No. It's a bet. Life is short.

And if I'm wrong - as I hope I will be - I still win.

Yah, some folks don't get that.

I'm somewhere between 50-75% in the market with still a large slug of cash to DCA in from a windfall.

Up or down doesn't matter for me. I win either way...and given the economic weirdness my target AA is 50/50 + EF with the intention of going as far as 80/20 + EF should the market crater. When it recovers I'll go back to 50/50.

[nigel_ht]

I never understand why people think gold is valuable if society collapses. It's not like you can eat it.

Clang is currently unemployed too. I wish him the best, regardless, but to have 2 years of expenses set aside and to be buying precious metals with unemployment insurance seems risky to me.

If it were me I’d be fortifying my emergency fund each month if I had free cash after my enhanced UI.

Wanderingwheelz,

I have 2 years of CASH, 10 years of bonds, and 15 years in the stock. To achieve further diversification, I need to buy more gold/silver.

My annual expense is about 60K per year. The maximum unemployment benefit without the Federal enhancement and extension is only about 10K.

KlangFool

You do not need to buy gold and silver to achieve diversification if you have a typical assortment of stocks, bonds and real estate? The trendy thing to do right now is accumulate gold and silver, I get it. Maybe not as trendy as buying bitcoin, but trendy nonetheless.

If you’re receiving $10K in income, but you’re expenses are $60K, and your prospects for employment are questionable, why would you be investing in anything longer-term? Are you selling stocks to buy the gold and silver?

Wanderingwheelz,

<< The trendy thing to do right now is accumulate gold and silver, I get it. >>

Not in my case. I am from the culture where we always keep some physical gold jewelry.

<<If you’re receiving $10K in income, but you’re expenses are $60K, and your prospects for employment are questionable, why would you be investing in anything longer-term? Are you selling stocks to buy the gold and silver?>>

1) I am retiring. I am 50+. My portfolio is big enough to bridge me until 67 years old and beyond.

2) No. I am not selling the stock to buy the gold and silver at this moment.

3) The gold/silver is protecting myself against short-term hyperinflation.

<<You do not need to buy gold and silver to achieve diversification if you have a typical assortment of stocks, bonds and real estate?>>

I disagreed.

KlangFool

Moderately off target...but there are gangs that target cultures that tend to keep gold jewelry and cash around (asians). We got hit and the police told us we were lucky we don't keep much around the house because they have it down to a science and only get caught in very strange circumstances. They are in and out in a few minutes and only grab jewelry and cash. We had iPads, cameras and other valuables lying around all untouched.

One such group got caught when a package of loot they were shipping to their processing site broke and a gold ring fell out. They melt everything down centrally and it's untraceable. They don't have local contacts or infrastructure. Evidently they fly in people for a quick run, hit a lot of houses quickly, move to different cities quickly and then fly home before the police can trace them so they don't care if seen or if there are photos.

[bigskyguy]

Generally speaking -
Equities as a whole, by any metric of value, are expensive.
Bonds as a whole, by any metric of value, are expensive.
Gold is expensive.
Real estate where I live (college town in Montana), is expensive.
I don't invest in commodities (don't invest in things I don't understand).

As long as interest rates stay so subdued, cash will maintain.

Most importantly, I have enough.

I prefer to invest when returns are favorable. For me, they don't seem very favorable at the moment. I don't tend to buy and sell, but hold for the long term. I admit I am a value investor, so I'm not predisposed to the high flyers (FAANGs). Besides, I can afford to wait. Therefore, I am holding significantly more cash as a % of portfolio than most. I also have a plan that affords me the freedom to do so.

I suspect my approach is very much out of style, and contrary to much of what I see written on this forum. I present it only to provide a counter narrative. For those who think and act otherwise, I truly hope you are successful. I just choose a different road. Best of luck to all.

[Triple digit golfer]

There is always a reason that one could use to justify hoarding cash and/or not investing new money.

The market is too high! It's going to tank because there's bad news coming! (Now)

The market has tanked and there's only more bad news coming! (March)

This all goes back to a good IPS. Have an emergency plan.

My fixed income minimum is two years. I won't go below that. This allows me to sleep at night.

In reality, in ANY situation, I'd simply sell whichever asset class was high. My AA is 80/20 and if a crisis hit and it turned to 70/30, I'd sell from bonds. If the market was great but I fell onto hard times and was at 85/15, I'd sell stock. I will always maintain 80/20, but with a two year fixed income minimum.

I have that minimum now and am right at 79/21, so new money is still going to equities.

Either you are trying to time the market, don't have an adequate emergency plan, or your AA is too aggressive. Identify which one it is and adjust accordingly.

[ohboy!]

Usual discussion here. Majority of Bogleheads will put everything at their asset allocation regardless of the environment. A few people want to time the market or hedge with gold or silver and that creates a disagreement. Gold and Silver is part of my asset allocation. So is cash. And 401k, Roth, HSA, etc. And let's just add to this mess of a topic CRYPTO!! Crypto is my best performer this year out of all my assets. Since I have a diversified portfolio I can "rebalance" when things go on sale. Right now equities are not on sale in my mind so I'm holding some cash. Who knows what the future holds, but it's good to hold everything that could be part of it.

[goodenyou]

I have accumulated a lot of cash with the plan to buy a house for cash in the next few years after the sale of commercial property a year ago. We are planning to relocate for a job opportunity for my wife and to be closer to the kids. I will be slowing down and working part-time. I am trying to figure out how much to allocate of the cash that would be earmarked to the house fund, and how much would be the EF. We haven't made a commitment on how much we want to spend on a house. In all, right now I am about 16% cash and 57% equities. However, if I use a significant portion of cash to buy the house, it would shoot my equities percentage up to 63%. This is a bit over my comfortable level, and I would sell some equities in qualified plans. We are FI for all intents and purposes.

[drk]

That's kind of a complicated question. Over the last month, my cash allocation went from ~35% of my portfolio to ~5% ... because I bought a house. Meanwhile, that allocation is growing again as I stopped buying stocks in my taxable account ... because of anticipated home-improvement expenses. So, no, I don't think I'm hoarding cash, but I'm also not aggressively buying stocks or bonds.