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Cash may not be king, but it’s still royal, yielding close to five percent in money markets. When your lazy cash is treated like a peasant by banks, it can be frustrating.
How about your stocks? It’s hard to see the big picture. It’s hard to act and put money in the stock market even if you know your allocation isn’t right for you.
It can be easy to get out of balance: too much in stocks, too much in cash, not enough in bonds.
Now, with the longer end of the yield curve rising for fear of too much debt, what are investors to do? For one, I recommend turning off your news feed. Today’s news is old news by tonight or sooner. But any nugget of news can keep an investor from taking action.
Many of you tell me, in my conversations with you, that you’re glad we’re working together, and your only regret is that we didn’t start earlier. Imagine if we started working together 25 years ago, I think to myself. And I wonder how different investor lives would be if we did.
One of my favorite quotes is from Jack Bogle, founder of the Vanguard Group, who said, “Don’t just do something, stand there.” With so many reasons to justify your actions or inactions today, it’s hard/easy to stand there. We can find any number of articles to support our gut feelings.
What’s important for you may not be important for the next guy. Only you know your risk tolerance and what I’ve learned is that investors don’t realize their intolerance, like a food allergy, until it’s too late.
Action Line: If you’re sitting on a pile of cash, is it the right place for you? Consider the yields we’re seeing today and consider taking action. You don’t want to miss the boat.
Originally posted on Your Survival Guy.
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