Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Cash percentage

Reply
carrot
Occasional Contributor
So what portion of your whole portfolio would you normally retain as cash, and in what form?
0 Kudos
11 REPLIES 11
Major
Regular Contributor
Around 5% on average
0 Kudos
WES
Super Contributor
Cash should be a position, like any share in your portfolio, depending on the market situation, during the last two weeks cash should have been maybe 50 % plus.
0 Kudos
THRESHOLD
Super Contributor
And by "cash" - I hope you mean Dollars, euros, pounds...
0 Kudos
carrot
Occasional Contributor
I was thinking of a money market fund for cash and have thought that around 20% of my total portfolio should stay in cash. I am not crazy about MM funds but its better than under the bed.
0 Kudos
WES
Super Contributor
Money market? What do you get, say 4-6 %, less tax, whilst inflation is 6.5 % Now that is a gauranttee way to lose your capital. I am not saying you must never have cash, but 20 % as a rule, means that you are gaurantteed to lose capital on 20 % of your portfolio. A cash position that large should just be an intrim position before going back into equities, but not a rule.
0 Kudos
carrot
Occasional Contributor
I know Money Market is pathetic but bank is worse and low risk profile indicate that I need a safe haven and fast access.
0 Kudos
MMouse
Contributor
Some interesting advice here. I can only assume, Carrot, that you do not have a house bond which is why you have cash in hand? If you do have a bond, then it should be an access bond where you can deposit your cash and take it back out when you want to invest it. I agree with the advice that 5% is the maximum you should keep in real hard cash.
0 Kudos
Salv
Frequent Contributor
Agree on the bond point, just purchased a property and am looking forward to 8.5% "return" rather than money market.
0 Kudos
Brommie
Frequent Contributor
Cash is just paper and if you take inflation into account it has no value. I only keep cash give or take to half of the amount of the CFD's deposits in my trading account. The rest goes to my flexi bond but I have no problem maxing the bond if investment returns can outperform the interest.
0 Kudos
carrot
Occasional Contributor
Correct MMouse. No bond and like I say, low risk profile so looking for a safe stash, preferably away from the markets (is there such a thing) since everything else is already tied up in there.
0 Kudos
Beukes
New Contributor
The bottom line: ANY return on cash is better than no return at all, considering inflation. You can't afford to not have money work if the aim is long-term wealth creation. I keep 10% of my portfolio in cash, 70% in a low-to-medium risk, longer term equity portfolio and 20% for geared investments to supplement growth and take advantage of market anomalies. Recently I found an instant-access savings account with ABSA with a 4.5% to 5% interest rate and no admin costs. It's a great rate as far as banks go. It is good enough for me, and convenient. Its called the depositor plus account.
0 Kudos