What % cash in portfolio?

[ruralavalon]

I certainly don't need to feel guilt or anxiety about not doing more to maximize my returns as a part of my retirement...

My sentiments as well.

Good enough is good enough.

[Charles Joseph]

50/42/8. I finally have come to peace with cash, sleep better having it on hand, but wouldn't feel good going over ten percent.

Retiring in approximately two years.

[mark_in_denver]

Having cash is ok if you think you might need it, etc. I had about 20% until 6 months so, then started buying bonds munis CDs treasuries at much better rates and prices. Luck ran my way.

[smectym]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

I don't hold cash in my portfolio. Cash is my emergency fund. I don't rebalance away my cash.

KlangFool

>>I am confused why anybody would do anything else. Money not in the market is not earning money, so all portfolio funds >>are invested at all times. Right?

Not quite right. Last I checked our cash is earning 4.67%.

The debate about whether cash is or is not an investment is ongoing, but in my view rather sterile. If an investor concludes cash is the best place for his money, whether we term that call an “investment decision” or something else is a “so what.” Right now cash is attractive as providing insulation from current market turbulence while providing some yield. But of course parking money in cash carries important risks, including opportunity costs and underperforming inflation, among others. And so do investments in equities or bonds also carry risks. Why the allocation to cash should carry some particular stigma, is something I have always wondered.

[ramram22]

I don't hold cash in my portfolio. Cash is my emergency fund. I don't rebalance away my cash.

KlangFool

If you maintain 120K at all times, you are rebalancing it. It's just that your allocation target is fixed, rather than a percentage.

A) I am not maintaining 120K all the time.

B) It is not part of my portfolio. Hence, there is no rebalancing.

KlangFool

All assets you own are by definition part of your portfolio. You are entitled to your own opinions but not your own facts, i.e. you're not entitled to your own definition of words.

[dogagility]

About 3% of our retirement portfolio is in "cash" I-bonds. The rest of the portfolio is 80:20 (equities:mainly duration-matched TIPS). Still working. Might retire next year or in three years.

We keep a month or two of current expenses in FZDXX (non-FDIC insured money market fund... oh, the risk! ), but that's not a part of our retirement portfolio.

[KlangFool]

I don't hold cash in my portfolio. Cash is my emergency fund. I don't rebalance away my cash.

KlangFool

If you maintain 120K at all times, you are rebalancing it. It's just that your allocation target is fixed, rather than a percentage.

A) I am not maintaining 120K all the time.

B) It is not part of my portfolio. Hence, there is no rebalancing.

KlangFool

All assets you own are by definition part of your portfolio. You are entitled to your own opinions but not your own facts, i.e. you're not entitled to your own definition of words.

If you don't rebalance your cash, why keep it in the portfolio? You can call whatever you want to make your own life more difficult. That doesn't mean someone else has to make the same decision.

Personal finance is personal.

KlangFool

[RobLyons]

14%, but with nuances.
That's my 6-9 month emergency fund which is going to double as a new vehicle purchase fund once we find what we're looking for. I'm also reducing my hours at work and taking time off this spring from my moonlighting gig in order to dedicate more time to my kids sports season. I would usually be around 7%.

[fourwheelcycle]

Bonds/cash is currently 7%, but it is all cash.

I also view bonds plus cash as one lump in our portfolio. For us, that lump aims for 15%, with the remaining 85% in VTSAX. The bond part is about 12.5%, all in VBILX. The rest is checking or Vanguard Federal Money Market.

[Opinika]

I'm at 10 - 11% cash, mostly T-bills of less than 1 year.

That's the most cash I've ever held.

[watchnerd]

~5%.

But we live a no-debt lifestyle.

No mortgage, no car loans -- so we have to accumulate piles of cash to pay for occasional major purchases like new cars or new houses.

[vrex]

5-10% in cash. When 10% is reached, I invest half in stock/bonds following 50/50 stock/fixed allocation. This returns me back to 5% cash. This works, since we still seem to be saving even in retirement. We could spend more, and do if we want something, but there’s not much we want. We try to live a simple life. “A man is rich in proportion to the number of things which he can afford let alone.”—HDT

[Gennaro Dillinger]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

20 years from retirement, I'd have it all invested.

[sperry8]

I keep way more than most (probably all) with 33% cash as of today. Happily I'm finally making a return on it, but over the years I haven't. But I sleep at night and never need to sell down. Got spooked way back in 08/09 (I retired year before) and watched nest egg drop in half. Wasn't sure how long it'd take to come back... eventually it did and so now I keep oodles of cash. The market can do whatever it wants now and I could care less. My cash + divs allows me to live a decade without worry. Although imprudent financially, helpful emotionally.

[enad]

I don't think it matters as it will be different for everyone. I am not relying on my retirement savings as I have other income streams so I can be both very aggressive and very conservative at times. When the economy as a whole slows, I tend to hold more cash as there have been and will be more buying opportunities in the future

[bh1]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

I don't hold cash in my portfolio. Cash is my emergency fund. I don't rebalance away my cash.

KlangFool

>>I am confused why anybody would do anything else. Money not in the market is not earning money, so all portfolio funds >>are invested at all times. Right?

Not quite right. Last I checked our cash is earning 4.67%.

The debate about whether cash is or is not an investment is ongoing, but in my view rather sterile. If an investor concludes cash is the best place for his money, whether we term that call an “investment decision” or something else is a “so what.” Right now cash is attractive as providing insulation from current market turbulence while providing some yield. But of course parking money in cash carries important risks, including opportunity costs and underperforming inflation, among others. And so do investments in equities or bonds also carry risks. Why the allocation to cash should carry some particular stigma, is something I have always wondered.

'Cash' to me means money earning (significantly) less than the risk free rate (say, 30 year treasuries). Investing less than the risk free rate for any reason other than to be immediately available for spending violates the principle that people prefer more money to less money. But, hey, if people want less money, then best of luck in their endeavors.

[Marseille07]

All assets you own are by definition part of your portfolio. You are entitled to your own opinions but not your own facts, i.e. you're not entitled to your own definition of words.

You get to choose what's in and out. For example, some folks might set aside 300K house DP outside of portfolio. Nothing wrong with that, as they don't want to rebalance their house DP.

[dbr]

All assets you own are by definition part of your portfolio. You are entitled to your own opinions but not your own facts, i.e. you're not entitled to your own definition of words.

You get to choose what's in and out. For example, some folks might set aside 300K house DP outside of portfolio. Nothing wrong with that, as they don't want to rebalance their house DP.

Of course you can consider the management and results of any aggregation you want to think about. As you say there can be good reasons to look at one set of assets in a different context from another set of assets. It might be counterproductive to do that arbitrarily without attention to why you are managing that way.

One of the peculiarities of my definition is that I count the checking accouknt in the portfolio. Therefore directing dividends or results of selling assets, taking an RMD to cash, etc. is not a withdrawal. Paying the electric bill, withdrawing cash at an ATM, etc. is a withdrawal. But then cash in the account is an asset. I have the numbers tabulated in such a way that it works out to meaningful self-consistent bookkeeping even if most people don't do it that way. I get to do that if I want.

[notoriousMG]

25% in pre-tax until I reach $50k in a post-tax account. I don't own a home or anything else and have a few people to take care of besides myself. I had to borrow against that amount from my retirement account in the past due to major medical expenses and it was lifesaving. It sucks to lose on growth long-term but borrowing against yourself is still better.

[bikechuck]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

2-3% plus 7% in ibonds

Why iBonds and not TIPS?

[faanger101]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

2-3% plus 7% in ibonds

Why iBonds and not TIPS?

Still struggling with buying individual tips. Lots are 25-50k

[kleiner]

In absolute numbers, we have about $750k in savings accounts and a MYGA which represents about 11.5% of our invested assets. This amount is more than I'd like but it's what allows my wife to sleep at nights. On the other hand, it will help a lot when we start doing aggressive Roth conversions in a few years when my wife eventually retires.

[Toons]

Less than 1%

[sal14]

Bonds/cash is currently 7%, but it is all cash.

How are you getting 7% on cash? Any other methods besides I bonds?

[rakish_weasel]

Bonds/cash is currently 7%, but it is all cash.

How are you getting 7% on cash? Any other methods besides I bonds?

Pretty sure pizzy is saying he/she holds 7% in cash, not that its annual rate of return is 7%.

[gubernaculum]

1% cash. Everything else is VTSAX.

[Van]

20% cash. Retired.

[L84SUPR]

About 35 percent G Fund to bridge to social security. I haven't decided how much G Fund I'll hold after SS kicks in. Maybe 10% which would make the AA 70/20/10 S/B/G.

[carminered2019]

Age 55, I keep 10 years in safe assets...CD, I-Bonds, US treasury, money market and don't care much about what percent it's.

[billthecat]

Age 55, I keep 10 years in safe assets...CD, I-Bonds, US treasury, money market and don't care much about what percent it's.

54. I do that but set a floor of 25% (across all fixed income).

And my target is one half marked to market (total bond, munis) and one half not marked to market which all could be considered “cash” (I bonds, money market).

[anoop]

97% at the moment. And actually all last year.

Is that your long term portfolio or are you expecting to have more allocated to stock when a certain event happens?

I’m 100% cash outside 401k.

[bmcgin]

97% at the moment. And actually all last year.

Is that your long term portfolio or are you expecting to have more allocated to stock when a certain event happens?

I’m 100% cash outside 401k.

Here's a little bit about me:

This is my long-term portfolio which is taxable. Only a very small portion of my savings is in tax advantaged accounts. I've put myself in a unique situation by electing to pay taxes. I get the benefit of using it today. And this aspect has shaped how I invest.

Right now the 97% is sitting in PCOXX and the 3% I've been day-trading and experimenting with a few dividend-centered positions. This gives me an interesting perspective. I am forced to understand market dynamics. Right now, I do not see a big opportunity for growth in the broad market. I see more opportunity for growth in the treasuries, CDs and money market funds.

My investment style is closer to Benjamin Graham's than John Bogle's. Graham teaches to monitor and adjust the stock to bond ratio according to what the market is giving. Even though he says not to dip below 25% in either category, I am fine with that in today's messy market. I am also content with a 4%+ return as 5%, 6% and maybe 7% look possible.

So to answer the question, there most likely will be a time when I gradually move to riskier and higher rewarding stocks. Maybe that time will come when inflation is under control and when the fed lowers rates because of that and not because something broke.

[suewolf]

I keep 1 - 2 years of my normal yearly expenses (food, medical, household, utility, etc) in cash. The rest I invest. Some of my investment is in short term fixed incocme which is higly liquid and perhaps some would classify as cash.

So I don't think of cash as % in my portfolio; it will change as my asset pool decreases over time not as the market changes.

[Houdini563]

I just retired and have around 5% in bank savings. So I’m around 35/60/5, stocks/bonds cds/cash overall. I sleep soundly.

[bcc1234]

21 months from retirement and we have 15%, which is 3 years worth of expenses. The plan is to keep that amount moving forward (the 3 years part).

bcc

[invest2bfree]

Now that trash is no longer trash - what percentage of the portfolio are people holding in cash or cash equivalents?

I'm starting to think 15% might be reasonable if 20+ years from retirement, since real yield can be had.

I don't hold cash in my portfolio. Cash is my emergency fund. I don't rebalance away my cash.

KlangFool

Same here, minimum $50k in cash is my rule.

[ruralavalon]

No cash "in portfolio". The only cash is whatever happens to be in my checking account, it varies, currently about 0.25% of the portfolio.

[KyleAAA]

I include my emergency fund as part of my portfolio and take it from the TIPS allocation, so it falls over time. No special allocation to cash beyond that seems prudent to me during accumulation. Maybe when we retire.

[Charles Joseph]

I read all of Taleb's books, and have become a convert to the survival mode of portfolio positioning...and it helps now that cash is above 4% yield. it all depends on your life situation and investing objectives, no % is right for everyone

What does Taleb recommend in terms of survival mode of portfolio positioning, and what book would you recommend one read first? The Black Swan? Something else?

[Charles Joseph]

A) I am not maintaining 120K all the time.

B) It is not part of my portfolio. Hence, there is no rebalancing.

KlangFool

No, rebalancing happens when you refill the EF. Unless a) you don't spend a dime out of EF or b) EF is never refilled, you're rebalancing.

This is absolutely meaningless, particularly since it’s not your emergency fund. Holding cash is a deeply personal issue. He already stated he doesn’t consider it part of his portfolio.

[stocknoob4111]

7% cash, 5% bonds... Age 49, retiring next year

[Marseille07]

7% cash... Age 49, retiring next year

Yeah, something like that is definitely reasonable. I personally recommend 1~2 years in cash, no questions asked.

[WhiteMaxima]

12% stable value fund (cash +short term bond)
12% bond index fund
12% real asset (tip and inflation protection asset)
18% balanced fund (60% equity 40% bond)
18% SPY500 index
18% Intl index
8% Russel 2000 index
2% company stock

[Sandwich]

Emergency Fund has cash equivalents including Treasury MMF and Treasury Bill Ladder.

Rest of Taxable is Stock Index Fund.

Retirement Funds are tilted toward Stock Index Funds (ROTH IRA)
and tilted toward Bond Index Funds (Traditional IRA / Non-Qualified Annuity)

[Munir]

52% cash and 48% VTSAX. Making annual gifts to heirs. Will also gradually reduce VTSAX closer to 40%.