If you follow this blog, you know that I advocate creating your own investment policy statement (IPS). I’ve never been a person to keep a large percentage of cash on hand. I’ve always thought that putting the majority of my money to work in other higher appreciation potential asset classes was the best thing I could do.
What I didn’t consider until recently is that cash is a very important asset class itself and that even though cash may appear to sitting idle losing ground to inflation, it’s in fact working for me by allowing liquidity to take advantage of great opportunities as they arise. This is why I am accumulating cash as an investment strategy.
I haven’t sold any assets to raise cash. My cash is higher than normal as a result of not putting my entire annual performance bonus from my employer to work as I would typically do.
While it’s been sitting in a money market account this year, I’ve started to think back to the many “investing opportunities” that I said, “I wish I had more cash to take advantage of this.” [Continue reading]