By Belinda Lim
A recent online survey commissioned by BlackRock revealed that investors think cash should take up 33% of their portfolio. In fact, more wanted to keep a higher proportion of cash. Those without financial advisers has an average of 46% in cash, while those with financial advisers kept 37% in cash.
It seems that people are still cautious and have a large allocation in cash. Such large allocations are typical of conservative risk profiles, does this mean that those surveyed are all conservatives? It would be interesting to study the relationship between how risk-averse one is and the amount of cash in their portfolio.
How Much Cash Should One Keep?
As a rule of thumb, everybody should first set aside cash for emergency funds. It can be anywhere from three to twelve months, see How Big Should Your Emergency Fund Be? …read more