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 Cash in Portfolio

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Thump

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PostSubject: Cash in Portfolio   Fri Mar 13, 2015 3:18 pm

Lot of discussions lately, the new Schwab robo advisor is using
up to 10% cash, other robo advisors none.

I think it should vary by the individual and how they might use it
and I like at least 10% in normal times.  More's better when the
market's high.  Cash usually pays about 5% a year over 10
years but not now with rates so low.  Money market funds
paying nearly nothing.  But it does have another value,
opportunity.  Got a chart from Morgan Housel showing how he
intends to deploy his in a pullback.

10% correction, happens about every 11 months, he puts in
$100 of each $1,000 he's holding.

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rockhump

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PostSubject: Re: Cash in Portfolio   Sat Mar 14, 2015 8:29 am

Yeah, like to keep about 10% in dry powder. Interesting chart though. He seems to be pretty bullish right up to a 20% pullback and then gets more conservative. Kind of a head and shoulders approach.

Sure is a volatile market. Still hard to believe we might reach "par" or more with the euro.
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Thump

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PostSubject: Re: Cash in Portfolio   Sat Mar 14, 2015 9:22 am

He's going with the odds, doesn't have much left for the
2 or 3 times a century.

I like to keep a little more but forgot to mention, that's not
counting emergency funds you should keep and ours are
comingled.
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Thump

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PostSubject: Re: Cash in Portfolio   Sun Mar 29, 2015 11:27 am

Double posting but one of Morgan Housel's co writers on
Motley Fool wrote a little more about his take on how much
cash to have in and out of your investments.

1. First, don't invest money you'll need within the next three
to five years.

2. Second, consider building up a small(ish) cash cushion
inside the portfolio.

3. Third, create a watch list of stocks you'd like to buy --
at the right price.

4. And finally, do this before the market makes its next
drop.  (getting your portfolio ready)

LINK
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rockhump

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PostSubject: Re: Cash in Portfolio   Sun Mar 29, 2015 3:31 pm

Whatcha got on the watch list (#3)?
Everything seems too high right now. The staples like HD, PG would be nice to buy on a pullback as their PE's are a little frothy right now. Of course, I'd probably grab AAPL again if it came back another 10-15%.
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PostSubject: Re: Cash in Portfolio   Sun Mar 29, 2015 5:13 pm

Right now just the stocks we already have. I need to find
a few more but just familiarizing myself with 5 star stocks
and dividend aristocrats.

Yeah, not excessively high right now but there's no real
bargains that I see.

Already have a lot of PG, don't want to have too much in one
stock. It's not really too high, just it's earnings are being
impacted by a weak international market right now. You
can't buy many stocks that don't have a lot of international
exposure. Europe's looking better despite the eternal
problem child Greece.

Need to sell a little Cracker Barrell but couldn't make myself
pull the trigger yet even when it hit that high. Just have
too much it grew so much. Our largest holdings now.
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