- Cash makes market volatility easier to handle
Most investors hardly talk about the role of cash in their investing strategy. That is not surprising since most people who spend time thinking of their investments dream about how large their portfolios will grow. Stocks hold the promise of becoming doubles, triples, 10-baggers, or even 100-baggers if you hold them long enough.
But cash does not have the same prospects, at least not at current interest rates. Investing cash at 1% right now, it will take you 72 years just to double your money. That does not mean however that there is no use to cash in one’s portfolio. No matter how aggressive you are in pursuing maximum returns, holding some cash can be a smart move. Here are some of the reasons why.
