What percentage of your assets do you like to keep in cash?

jmski52

I know that it depends on your philosophy - how much in cash or cash equivalents you keep is related to whether you believe we are headed for inflation or deflation, and whether you prefer "putting money to work" vs. keeping your powder dry, or "safe".

So, how would you characterize the financial environment now? Are we in an inflationary trend, or deflationary?

Which is more risky right now - 1) the stock market, 2) bonds, 3) cash or 4) precious metals?

I find myself more concerned about what to do with my cash than any of my other assets. My main question is about cash. What percent of your total assets do you like in cash? How so?

pursuitofliberty

I like to have 6 to 8 weeks of "cash" ... meaning in my checking account with ready access, not tied to anything, just a float for the ongoing expenses of life

I also keep a small amount of cash ready in case I need it and can not do an electronic withdrawl for a few days or so (this could last a several weeks or more if it was only for food / gas, as I wouldn't use it to pay normal "bills")

Otherwise I try to have my "money" somewhere else, although much of it could be ready (in anything other than a SHTF scenario) quickly

I suppose this means my cash reserve is typically less than 5% of my net worth, even if you remove my (very) humble abode


overall I think we inflationary - regarding risk, they all have it and I own all 4 listed


I'll be interested what others may say

gecko109

I keep....on average....about 1-3% of my entire asset portfolio in actual cash. I absolutely hate the USD with a passion. In my eyes, its not really even an asset, but rather a necessary tool.....at least for now.

Wingsrule

Including the cash in my emergency fund, 8.3%. If I had a real job, that number would be lower.

That consists of FRNs and a separate checking account, but excludes free / available cash in my brokerage account.

After all, when that next big PM correction hits, how can you back up the truck if you are cash poor?

Downtown1974

I keep an 8 month emergency fund in the bank. I never touch it and do not intend to unless I lost my job. I also keep extra cash in my checking account for unexpected bills like car or home repairs. The rest of my "readily available assetts" are tied up in PMs.

bestmr

I recently just started a new job after being unemployed for several months. In that time I used my savings so most my cash is being used to pay off bills and slowly replenish what I once had. I do splurge now and then on PM's though.

Baley

I'm about 1% cash (and 20% of that amount in actual, physical currency in a variety of denominations)

derryb

Do you mean actual cash or do you mean dollar denominated banking accounts?

Me:
$1k in cash.
one month's expenses in checking.
zero in savings.
everthing else in PMs of various types (physical, IRA mining stocks and PM ETFs).

If you've been in PMs for more than a couple of years, you have a built in safety net (your actual cost) if prices take a major hit. Hopefully this will hold true in a couple of years for those just starting out at what they view as expensive price ($600 gold was expensive at one time). I figure my average cost to be $800 oz. on the physical gold and $16 oz. on the physical silver. These numbers allow me not to worry about price drops.

secondrepublic

About 5% in cash... this will go lower soon since I am hopefully buying an investment property soon. Another 10% currently sitting in cash in a brokerage account tied to my retirement plan.

gsa1fan

Bout $500 in reach and few months worth every day bills in checking. I like keep my $$ tied up/working

renman95

Are credit cards cash?

fastrudy

About 70% in cash now because I just sold my home. Waiting to see what happens...

cohodk

"Which is more risky right now - 1) the stock market, 2) bonds, 3) cash or 4) precious metals"

Right now means for how long? If you mean over the next year then I rate from least risky to most...

1. cash
2. bonds
3. precious metals
4. equities.

I'll also add the most risky usually yields the greatest and least returns.

Actually i'll would rate the above the same over the next 2-3 years. There are way too many variables to consider in any longer timeframe.


To answer the OP, I went into the weekend at about 40% cash, 20% short and 20% long although hedged for a 10% decline in price over the next week. Hedges also cover PM holdings. Cash is in a money market.

gecko109

Renman winks about the credit card availability.....but in reality, thats a "safety net" as well.

Hypothetically, if a person had 5 months worth of monthly expenses in credit card availability, and another 12-15 months worth of monthly expenses in physical metals.....then why in the world would he need a few months worth of expenses in the form of cash in a bank account?

FistFullOfDollars

today $25...

Baley

today $25...

pretty small fists if that fills 'em up

Barndog

<< <i>today $25...

pretty small fists if that fills 'em up >>



Ikes?

Spooly

25% of assets, I'm waiting for the next buying opportunity. (I went into cash just before the debt vote mess) I don't like the stock market charts, but I'm still holding all my junior gold/silver, rare earths and nuke stocks.

Goldbully

What percentage of your assets do you like to keep in cash?

Not nearly enough!!!!

dontippet

I have about $500 cash which is huge for me. Like mentioned above, my safety net is my credit cards. I also have a line of credit on my house which is essentially as good as cash, but it is a loan.

piecesofme

I got dizzy trying to read and think of answers to all the questions. What was the question again?

Justacommeman

50% currently and that's no real net change this quarter. MJ

OzzyAndy

I've got a home loan that is flexible and allows money in or out at any time so any spare cash goes in there, earning higher effective interest than banks can give and tax free. Ahead by about 20% of total assests so could get that cash any time.

dimples

Also 50%. Waiting for buying opps

Downtown1974

<< <i>Renman winks about the credit card availability.....but in reality, thats a "safety net" as well.

Hypothetically, if a person had 5 months worth of monthly expenses in credit card availability, and another 12-15 months worth of monthly expenses in physical metals.....then why in the world would he need a few months worth of expenses in the form of cash in a bank account? >>



I would sell the metal before using my credit card as a "safety net".
I would rather have cash in a savings account earning .50% interest, than paying 17% interest to a credit card company.

pf70collector

Right now my 401K is all in cash. Waiting for 6K Dow then I may venture back in. Really don't care what the DOW does, but this is the entry point I will feel comfortable with.

pragmaticgoat

1.9% of net worth now; like to stay between 1-3%

tetradrachm

I probably keep about 5-10% of assets in cash, checking, savings and money market accounts. That's about 3-6 months' expenses or so, I guess. That is for unexpected expenses, emergencies, or any good deals I run across, whether paper assets or precious metals (gold, silver, and steel--blued or stainless)

I use credit cards for their convenience but pay them off every month and would never consider something a safety net if it can be pulled out from under me at a moment's notice by a bankster, you know, the guys who lend you an umbrella and then ask for it back when it starts to rain.

If it comes to it, I always have pm's or stocks that I would be willing to sell before I would start running up the credit cards. Been there, done that, paid the 'stupid tax'. No thanks, not again.

jmski52

The rate on 30-year Treasuries is dropping and the spread between 10-year Treasuries vs. 30-year Treasuries is narrowing.

I interpret this flattening of the yield curve as a move towards cash and away from risk. I also question whether an inversion of the yield curve is coming, which would further imply that cash is at a premium.

This would back up cohodk's preference for cash, but I don't know how much impact it would have on gold. It smacks more of central bank desperation and "backs against the wall" than anything else.

Agree? Disagree?

cohodk

The spread between 10 and 30 yr bonds in Germany is only 90 bps.

Europe is scrambling to find dollars.



the European Central Bank said it will work with the Federal Reserve and other central banks to lend euro-area banks dollars

jmski52

I may not be up on the intricacies of international finance, but isn't the "solution" being offered now some type of short-term (3 months) currency swap, Euros for Dollars - in order to provide "dollar liquidity"?

How does this cure insolvency of the PIIGS? I just don't get it. We're buying Euros now? What do they expect to happen in 3 months?

It's really curious that the liquidity problem is a result of the bankers distrusting each other. Very interesting. It cannot be good for common taxpaying citizens.

cohodk

<< <i>I may not be up on the intricacies of international finance, but isn't the "solution" being offered now some type of short-term (3 months) currency swap, Euros for Dollars - in order to provide "dollar liquidity"?

How does this cure insolvency of the PIIGS? I just don't get it. We're buying Euros now? What do they expect to happen in 3 months?

It's really curious that the liquidity problem is a result of the bankers distrusting each other. Very interesting. It cannot be good for common taxpaying citizens. >>




It doesnt cure insolvency. Investors want dollars above anything else. Europe is hoping 3 months will buy enough time for another "solution". As Mr.T would say, "I pity the fools.." LOL

This is what is most likely to happen. Greece defaults. Portugal seeing this as an easier way out than austerity, says, "We default". Spain says, "Me too". Ireland, having gone through much restructuring flips the bird to the EU, learns Spanish, and says, "no mas".

Asset prices collapse, except for the one nobody (at least on this board) wants.

I wouldnt worry about many more bailouts. Sure you will see and hear bailouts mentioned, but the markets are bigger than any central bank or economy. Debts will be allowed to default. Assets will be repriced. Life will go on.

Baley

How is all of this deflation expected to affect the prices of the shares of companies with strong earnings and high expected earnings growth? say with a 10-15 hear horizon? thanks

cohodk

10-15 years is WAY too long for an investor to even begin contemplating.

Stocks that can show strong and consistant earnings and revenue growth will do extremely well. Those companies that perform in line with the economy will see their PE multiples shrink. Those companies which are now trading at high multiples had better prove themselves, or they will suffer a fate similar to NFLX today.

Investors who are able to identify and invest in strong companies will most likely say, "What deflation?"

jmski52

This is what is most likely to happen. Greece defaults. Portugal seeing this as an easier way out than austerity, says, "We default". Spain says, "Me too". Ireland, having gone through much restructuring flips the bird to the EU, learns Spanish, and says, "no mas".

Asset prices collapse, except for the one nobody (at least on this board) wants.

I wouldnt worry about many more bailouts. Sure you will see and hear bailouts mentioned, but the markets are bigger than any central bank or economy. Debts will be allowed to default. Assets will be repriced. Life will go on.

So the world reserve currency gets stronger because the others suck so bad?

Our businesses will suffer from a higher dollar, which leads me to think that it won't happen. Less business activity, lower tax revenues, bigger deficits. They are already stuck between a rock & a hard place with "jobs" as the leading political issue.

Interest rates are already at historic lows, so a stronger dollar implies the need for more money pumping to compensate for stagflation. This time, it's only about compensating for job losses, not about stimulating new job growth - come to think of it, maybe that's what it really was last time around.

It's going to be a tough nut to crack, and I just don't see the political will from anyone to allow asset prices to collapse without a fight. I agree that markets are stronger than a government, but that doesn't mean they won't inflate like fiends in a futile attempt to make their vision come true.

Cladiator

3 months salary in cash, 3 months salary in PM's, 3 month salary in a savings account. All to be held for emergencies only. That's how we roll in the Cladiator house.

WinPitcher

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cohodk

<< <i>The spread between 10 and 30 yr bonds in Germany is only 90 bps. >>




I thought this was amazing when I wrote it, so I had to look at the yield curve in Japan, which we all know has been mired in deflation for the better part of 2 decades. The spread between 10 and 30 yr bonds in Japan is currently 93 bps. In Germany it is now 85 bps. In Japan short term rates are at 0% and the 30 yr at 1.94 giving a spread over the entire curve of 1.94%. In Germany, the ECB is still holding short term rates at 1.5% and the 30 yr in Germany is 2.76%, giving a spread of 1.26%. So in Germany the yield curve is flatter than in Japan. Im wondering if Germany isnt already seeing the deflation seeds sprouting.

I do expect the ECB to cut rates dramatically over the next year so maybe that will keep Germany from the abyss.

Trichet called my bluff of not raising rates in the Spring. Now he suffers mightily.

johnny9434

<< <i>Are credit cards cash?
>>



extreme last measures on that slick. no one should carry a balance on a credit card period. jmho ( thats what got some into major trouble in the first place )

Bear

25%.

Bear

25% Vanguard Fund earns dividends of 4-5%. Very conservative, mostly high dividend stocks

high quality corporate and some municipals and treasuries.(Vanguard Life Strategy Income Fund)

25% cash bank accounts insured

50% rare coins

All debts paid off in full.

The above maf not suit all, but when one is old, retired and very ill, it is wise to be somewhat deversified
in the most conservative and easily converted to cash, manner as possible. Unnecessary risk, is no longer
an option to be considered.

ksammut

About 33%.

pf70collector

Right now my 401K is in all cash. Took out a loan for half on it in the beginning of the year and bought some PMs in January.