Anyone else hoarding cash right now?

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rockthisworld
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Re: Anyone else hoarding cash right now?

Post by rockthisworld »

UncleLeo wrote: Tue Aug 11, 2020 3:27 am
rockthisworld wrote: Sat Aug 08, 2020 12:05 pm
JustinR wrote: Wed Aug 05, 2020 6:34 am 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.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I cashed out half of my portfolio in July. I just saw a lot in the data if you look at high unemployment, benefits running out Jul 31st maybe reinstated soon with less benefits which hurt consumers. And either way we are adding debt at a massive level. Money is debt. I’m holding cash and either going to deploy it into SP500 if it starts to crash (20-30%) start to DCA or gold pulls back to the $1800 resistance or housing market comes down about 15-20% or a combination of the three. I’m not sure what the future holds but I’m waiting for value.
What if we never see -20% below current levels? What if the next 20% crash happens only after 30%+ additional rally? When will you be back to your desired AA in this case?
"adding debt at a massive level. Money is debt" - Isn't this a reason to be bullish on stocks? more money in circulation => inflationaly force.
Use currency (cash) to get more cash and turn that into assets like gold silver real estate. Be independent from the system. Holding cash is pointless real estate will never go to 0 roof over your head. Gold and silver is Gods money and will never be worthless. Currency which is just paper and only backed by the faith of the government that issues it. It is a debt note which is paid back with interest.
Robot Monster
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Re: Anyone else hoarding cash right now?

Post by Robot Monster »

rockthisworld wrote: Thu Aug 20, 2020 8:07 am Use currency (cash) to get more cash and turn that into assets like gold silver real estate. Be independent from the system. Holding cash is pointless real estate will never go to 0 roof over your head. Gold and silver is Gods money and will never be worthless. Currency which is just paper and only backed by the faith of the government that issues it. It is a debt note which is paid back with interest.
In other words, best to invest in gold, silver, and real estate, because they can never be worthless, unlike cash which can. I know cash can become worthless with hyperinflation; is there another way?

One's disinclination toward piling into gold, silver, and real estate might have less to do with these becoming worthless, more to do with how much their value could plummet and how long remain depressed.
edwardtan
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Re: Anyone else hoarding cash right now?

Post by edwardtan »

Currently market sentiment has been very bullish with around 85% of stocks in the market trading above their 6 month moving average.
As the market is rewarding investors for taking risk, it does not make sense to be hoarding cash right now but instead putting your cash to work by investing in stocks. As shown in the plot below, the estimate cash allocation based on the current market sentiment should be close to 0%.

Image
Source
Marseille07
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Re: Anyone else hoarding cash right now?

Post by Marseille07 »

I'm still in the middle of DCA-ing unfortunately. Oh well.
Robot Monster
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Re: Anyone else hoarding cash right now?

Post by Robot Monster »

Marseille07 wrote: Mon Nov 16, 2020 8:07 pm I'm still in the middle of DCA-ing unfortunately. Oh well.
Better than being trapped in cash.
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MortgageOnBlack
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Re: Anyone else hoarding cash right now?

Post by MortgageOnBlack »

This has been me lately. The Emergency Fund is starting to look really big right around now while the Dow is bouncing around 30,000... Still DCA investing into my Roth, but my taxable investing has stalled - I was new to Taxable investing and did it manually starting late 2019.

My plan is forcing myself to jump back in on 1/1/2021 and not look back (Going to use monthly auto contributions to hopefully keep me from "timing" like I did this year and late last year)... Being truthful, I did find myself dramatically increasing my Emergency Fund during this year and not sticking to my taxable account like I should have - currently grown to 2.6x my yearly expenses at the moment. I need to decide on a emergency fund expense amount already (6 months or 1 year expenses should be my max for cash).
Marseille07
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Re: Anyone else hoarding cash right now?

Post by Marseille07 »

Still DCAing as well. I have a TA indicator, which basically works more or less like "buy after a red day." These days we're seeing more red days so the pace of DCA is picking up a bit.
surfstar
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Re: Anyone else hoarding cash right now?

Post by surfstar »

rockthisworld wrote: Sat Aug 08, 2020 12:05 pm
I cashed out half of my portfolio in July. I just saw a lot in the data if you look at high unemployment, benefits running out Jul 31st maybe reinstated soon with less benefits which hurt consumers. And either way we are adding debt at a massive level. Money is debt. I’m holding cash and either going to deploy it into SP500 if it starts to crash (20-30%) start to DCA or gold pulls back to the $1800 resistance or housing market comes down about 15-20% or a combination of the three. I’m not sure what the future holds but I’m waiting for value.
So if the S&P500 falls back to July 2020 levels, then you'll invest? :oops:
rockthisworld wrote: Thu Aug 20, 2020 8:07 am
Use currency (cash) to get more cash and turn that into assets like gold silver real estate. Be independent from the system. Holding cash is pointless real estate will never go to 0 roof over your head. Gold and silver is Gods money and will never be worthless. Currency which is just paper and only backed by the faith of the government that issues it. It is a debt note which is paid back with interest.
Well, if you purchase gold and silver and then the price drops, it would then be worth less, right? :P
Hmm, not sure I'm going to take your investing advice for gold, silver and RE, after how you've underperformed the last 6 months.
mr_brightside
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Re: Anyone else hoarding cash right now?

Post by mr_brightside »

i wouldn't say 'hoarding'

should be getting a decent 2020 bonus in January that will be funding the Roths

-------------------------------------------
remember Enron?? I do
Vtsax100
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Re: Anyone else hoarding cash right now?

Post by Vtsax100 »

If the market goes down I will back up the truck. If the market goes up I will back up the truck. When I get money I buy VTSAX. I wish I had bought more when I was younger. When Im older I will probably wish I had bought more now. But I can’t.
jsapiandante
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Re: Anyone else hoarding cash right now?

Post by jsapiandante »

Have a lot in cash at the moment but not because I'm hoarding or waiting for the market to drop. On January 1, 2021, I will max both our Roth at $6k each and then whatever money is left over from the last quarter of 2020 (currently 18k, most likely more after year end bonus and December paychecks) after expenses into our after tax account. This way has worked for us the past couple of years as we've been trying to spend more. 2020 ended up being our lowest yearly expense since we couldn't vacation and eat out. So we've had a lot of extra cash put in during the market downturn earlier in the year and following months thereafter. It's helped grow our net worth nearly 60% higher in the process.
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AerialWombat
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Re: Anyone else hoarding cash right now?

Post by AerialWombat »

Yes, I am hoarding cash. Approximately 1/3 of monthly savings goes into HYS and CDs, 1/3 into equities, 1/3 into muni bonds.

This is not new behavior, and has absolutely nothing to do with valuations, pandemic, economy, Geminid meteor shower, etc. This is just my normal course which I am staying.
For entertainment purposes only.
Independent George
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Re: Anyone else hoarding cash right now?

Post by Independent George »

I'm debating the merits of reducing my automatic investments - not because I want to capitalize on a crash, but because I'm increasingly worried about my job security. The thing is, I already have an emergency fund that can sustain me for eight months, and a taxable brokerage account worth another ten months on top of that. A year and a half of expenses is probably sufficient, but a part of me is always going to be worried.
gonefishing01
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Re: Anyone else hoarding cash right now?

Post by gonefishing01 »

Vtsax100 wrote: Mon Dec 14, 2020 6:18 pm If the market goes down I will back up the truck. If the market goes up I will back up the truck. When I get money I buy VTSAX. I wish I had bought more when I was younger. When Im older I will probably wish I had bought more now. But I can’t.
Same. I’m a TSM buyer right now. Close to FI and swinging for the fences :beer
APX32
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Re: Anyone else hoarding cash right now?

Post by APX32 »

Independent George wrote: Mon Dec 14, 2020 6:27 pm I'm debating the merits of reducing my automatic investments - not because I want to capitalize on a crash, but because I'm increasingly worried about my job security. The thing is, I already have an emergency fund that can sustain me for eight months, and a taxable brokerage account worth another ten months on top of that. A year and a half of expenses is probably sufficient, but a part of me is always going to be worried.
I’m not so much worried about job security (job is as secure as can be all things considered), but I’ve always wanted a certain level of peace of mind. For me that happens to be exactly 2 years expenses (approximately $120k) in cash sitting in short term treasuries right now earning close to zero. I’m OK with this. If something happens, it’s good to know that I don’t have worry about finances for 2 years. After that I have 2nd, 3rd, and 4th tier emergency funds (taxable, I-bonds, Roth), so going beyond 2 years’ cash expenses would be excessive.

I would never want to be < 2 years expenses in cash, that’s my personal decision.
40% SPY | 10% GLD | 5% BTC | 45% Cash (cold hard cash)
monodactyl
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Re: Anyone else hoarding cash right now?

Post by monodactyl »

I'm someone who panicked in March. I'm semi-retired so I don't have a stable income to buy dips with. I live almost entirely off my portfolio. I'm also in the habit of selling covered calls on my long equities. Consequentially I was as high as 40% cash in terms of assets.

I've since got that down to 20%. It's been hard to pull the trigger to put it all back at once since I'm not drawing a salary and I can't DCA from income. But what I have been doing is selling cash secured puts to try and tie my own hands to get back in the market. With the non-stop uptrend we've been having though, not of those puts I sold were assigned to me and I just collected the premium. Admittedly, it's nice, amounting to almost 12% a year on cash. That being said, I would have probably rather had owned the underlying with how on fire the market has been.
deserat
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Re: Anyone else hoarding cash right now?

Post by deserat »

Thanks for starting this interesting thread. I have wondered about my cash position and how to move forward as well.

I just did a fairly large IRA2Roth conversion and will be using cash for the tax liability. I am thinking of reducing my tax investment to only the employer match while maxing out the ROTH next year. I want to be able to do what I did this year and pay for my continuing IRA2Roth conversion tax liability with cash. I also am planning on retiring in the next year or so and will need 1-2 years cash buffer to cover my lifestyle expenses until I receive a pension, the amount of which should cover most of my lifestyle expenses.

It's the balance between filling up the tax-deferred space while at the same time transitioning those funds to a Roth. I envision the classic tub filling problem of the tap running and the drain open; I want the tub to drain and not overflow in the tax-deferred space.

In any case, I also believe that the worldwide economic hit with regard to lockdowns has yet to be determined; there is quite a lag right now with regard to the response as there is significant government intervention. I don't know how long the repercussions can be withstood before a market hit of some sort.

I do invest in index funds, so should be OK either way, nevertheless, as I come up on a major life transition, I think that having a bit of a larger cash cushion will provide me some options I might not otherwise have.
Wanderingwheelz
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Re: Anyone else hoarding cash right now?

Post by Wanderingwheelz »

I just invested all of my emergency fund In VXUS yesterday. I decided that with a portfolio that has grown larger than I’d imagined by this point, if I wanted to do a home improvement or buy a new car I can just sell stocks or bonds to do it.

There’s risk in having cash just like there’s risk in having equities- they’re just different risks. Only you can decide what the best balance is.
3 Fund Portfolio. 70%/30% AA. No mortgage. Simple.
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Makaveli
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Re: Anyone else hoarding cash right now?

Post by Makaveli »

Wanderingwheelz wrote: Tue Dec 15, 2020 7:43 am I just invested all of my emergency fund In VXUS yesterday. I decided that with a portfolio that has grown larger than I’d imagined by this point, if I wanted to do a home improvement or buy a new car I can just sell stocks or bonds to do it.

There’s risk in having cash just like there’s risk in having equities- they’re just different risks. Only you can decide what the best balance is.
Cash to Total International, love it.
Wanderingwheelz
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Re: Anyone else hoarding cash right now?

Post by Wanderingwheelz »

Makaveli wrote: Tue Dec 15, 2020 8:06 am
Wanderingwheelz wrote: Tue Dec 15, 2020 7:43 am I just invested all of my emergency fund In VXUS yesterday. I decided that with a portfolio that has grown larger than I’d imagined by this point, if I wanted to do a home improvement or buy a new car I can just sell stocks or bonds to do it.

There’s risk in having cash just like there’s risk in having equities- they’re just different risks. Only you can decide what the best balance is.
Cash to Total International, love it.
Huh?
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z3r0c00l
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Re: Anyone else hoarding cash right now?

Post by z3r0c00l »

This is a handy reminder about how silly it is to try and time the market. The OP must have lost out on countless thousands of dollars and I doubt they will ever get it back.
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Makaveli
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Re: Anyone else hoarding cash right now?

Post by Makaveli »

Wanderingwheelz wrote: Tue Dec 15, 2020 8:29 am
Makaveli wrote: Tue Dec 15, 2020 8:06 am
Wanderingwheelz wrote: Tue Dec 15, 2020 7:43 am I just invested all of my emergency fund In VXUS yesterday. I decided that with a portfolio that has grown larger than I’d imagined by this point, if I wanted to do a home improvement or buy a new car I can just sell stocks or bonds to do it.

There’s risk in having cash just like there’s risk in having equities- they’re just different risks. Only you can decide what the best balance is.
Cash to Total International, love it.
Huh?
Read it at face value.
rockstar
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Re: Anyone else hoarding cash right now?

Post by rockstar »

z3r0c00l wrote: Tue Dec 15, 2020 8:35 am This is a handy reminder about how silly it is to try and time the market. The OP must have lost out on countless thousands of dollars and I doubt they will ever get it back.
They can start investing in triple leveraged products and roll the dice. The effect of playing catch up is taking on more risk as you get older instead of less. It's why, I think, pensions are a far better alternative for most people.
atdharris
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Re: Anyone else hoarding cash right now?

Post by atdharris »

It's hard to justify holding much cash now. I have ~6 months of expenses in a NPCD, but I plan to use whatever cash bonus I receive this week to fund my Roth and then I'll probably add the rest into VTI in my taxable account. It does not excite me to put it in my savings account earning 0.5%.
bikechuck
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Re: Anyone else hoarding cash right now?

Post by bikechuck »

MortgageOnBlack wrote: Mon Dec 14, 2020 5:39 pm This has been me lately. The Emergency Fund is starting to look really big right around now while the Dow is bouncing around 30,000... Still DCA investing into my Roth, but my taxable investing has stalled - I was new to Taxable investing and did it manually starting late 2019.

My plan is forcing myself to jump back in on 1/1/2021 and not look back (Going to use monthly auto contributions to hopefully keep me from "timing" like I did this year and late last year)... Being truthful, I did find myself dramatically increasing my Emergency Fund during this year and not sticking to my taxable account like I should have - currently grown to 2.6x my yearly expenses at the moment. I need to decide on a emergency fund expense amount already (6 months or 1 year expenses should be my max for cash).
Depending on your age, objectives and total assets an emergency fund of 2.6X yearly objectives might be just fine. It would be too large (in my judgement) for a younger person still accumulating assets but not too large for a retiree with an average or below average portfolio in the deaccumulation phase.
bikechuck
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Re: Anyone else hoarding cash right now?

Post by bikechuck »

nigel_ht wrote: Sat Aug 08, 2020 6:14 pm When the fear meter pegged I started buying.
When the greed index gets high I pull back a little.
Option traders are wrong most of the time so being contrarian strikes me as safer.
This could be so helpful for so many ... could you please share where I can monitor the "fear meter" and "greed index" that you have referenced? It could be the key to sensibly managing my portfolio in my deaccumulation years which I began 3 and 5/12 years ago.
secondopinion
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Re: Anyone else hoarding cash right now?

Post by secondopinion »

JustinR wrote: Wed Aug 05, 2020 6:34 am 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.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I am on the side of being slightly cautious right now; not because of the market but because of job security since my company was hit badly during 2020 (I was somewhat reckless during March 2020 and it paid off, but I am de-risking myself right now). I am holding my gain though (as the taxes would be considerable).

I am not worried about a collapse as much as a loss of job. By the start of 2021, I hope to have the reserves to go full steam ahead on investing.
It is better to be half-wrong than have a 50% chance of being all-wrong. With the former, you will learn and have money to try again. Otherwise, you will never learn and will have nothing eventually.
rockstar
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Re: Anyone else hoarding cash right now?

Post by rockstar »

secondopinion wrote: Tue Dec 15, 2020 12:42 pm
JustinR wrote: Wed Aug 05, 2020 6:34 am 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.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I am on the side of being slightly cautious right now; not because of the market but because of job security since my company was hit badly during 2020 (I was somewhat reckless during March 2020 and it paid off, but I am de-risking myself right now). I am holding my gain though (as the taxes would be considerable).

I am not worried about a collapse as much as a loss of job. By the start of 2021, I hope to have the reserves to go full steam ahead on investing.
I wonder how many people are going to dump their gains in March/April next year once they cross the one year point on these gains. I have some purchases from March 2020 up 60%.
nigel_ht
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Re: Anyone else hoarding cash right now?

Post by nigel_ht »

bikechuck wrote: Tue Dec 15, 2020 11:09 am
nigel_ht wrote: Sat Aug 08, 2020 6:14 pm When the fear meter pegged I started buying.
When the greed index gets high I pull back a little.
Option traders are wrong most of the time so being contrarian strikes me as safer.
This could be so helpful for so many ... could you please share where I can monitor the "fear meter" and "greed index" that you have referenced? It could be the key to sensibly managing my portfolio in my deaccumulation years which I began 3 and 5/12 years ago.
https://money.cnn.com/data/fear-and-greed/
secondopinion
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Re: Anyone else hoarding cash right now?

Post by secondopinion »

rockstar wrote: Tue Dec 15, 2020 12:54 pm
secondopinion wrote: Tue Dec 15, 2020 12:42 pm
JustinR wrote: Wed Aug 05, 2020 6:34 am 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.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I am on the side of being slightly cautious right now; not because of the market but because of job security since my company was hit badly during 2020 (I was somewhat reckless during March 2020 and it paid off, but I am de-risking myself right now). I am holding my gain though (as the taxes would be considerable).

I am not worried about a collapse as much as a loss of job. By the start of 2021, I hope to have the reserves to go full steam ahead on investing.
I wonder how many people are going to dump their gains in March/April next year once they cross the one year point on these gains. I have some purchases from March 2020 up 60%.
I do not plan to do so; I got a serious discount to hold them for a long time.

I guess my value investor streak is surfacing since I had intense frugality since my early life. E.g, I bought shoes when I was 8, I bought the cheapest shoes that fulfilled the needed requirements (sufficient durability and right size); they were described as "ugly", but I did not care. I have dressed the same way for many, many years; bought the same quality things on a high discount; and never had FOMO. I have lived the same way despite my growing net worth; recipe for success.

Disclaimer: I have "invested" (being CDs though) since I was about 10 (and no, my parents did not expect me to save money in the quantities I did). I have actively managed my money since 16 (that is, gave orders as to how it was done exactly; before then, it was 5 year CDs only), invested in "risky" assets directly since 25 (I think as I cannot remember my age half the time; education and expenses robbed my ability to invest before then), and I continue to learn about the subject (started learning since about 19). I guess this is a soapbox speech, but really we should teach the rising generation to invest; I am surprised and bothered that less is done in terms of financial education in schools. Mathematics is another, but this is a much bigger soapbox topic.
It is better to be half-wrong than have a 50% chance of being all-wrong. With the former, you will learn and have money to try again. Otherwise, you will never learn and will have nothing eventually.
dacalo
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Re: Anyone else hoarding cash right now?

Post by dacalo »

I bought even MORE during the downturn because I have seen this tune before. I did save more cash past 3 months to rebuild our emergency fund but buying equity is business as usual. The thing is, NOBODY knows what's going to happen in the future so I just buy and buy.
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