Put Cash Back in Your Portfolio

It’s time to consider putting cash back into your portfolio, according to a recent article in The Wall Street Journal. “The value of cash was demonstrated in the first quarter,” the article reported, adding that both stocks and bonds lost money during that period for the first time since the failure of Lehman in 2008. Cash and “near-cash” products, the article points out, have three properties that should appeal to investors at the moment: an… Read More

The Value of Cash and the Gurus

By Justin J. Carbonneau (@jjcarbonneau) — Cash may be one of the most boring things to talk about when discussing a company and its investment prospects. Things like a company’s business model, its stock price, its future growth forecast, its yield, and its valuation are far more exciting. But cash is an asset that gives companies many options both in terms of pursuing growth opportunities and other forms of capital allocation like buying back shares,… Read More

Fund Manager Holds Cash in Anticipation of North Korea-Prompted Selloff

AMP Capital’s Nader Naeimi, who heads one of the firm’s dynamic investment funds, has about 30% of his holdings in cash, according to a Bloomberg article from earlier this month, and sees North Korea situation as “one of the factors that could eventually bring down the long bull run in equities.” In addition to his cash holdings, Naeimi has “an allocation to gold and is short emerging-market currencies versus the dollar. His fund has beaten 77… Read More

Amidst Conflicting Signals, Keeping Cash May Be Prudent

In an environment where markets look expensive and are sending conflicting signals, keeping a store of cash might not be a bad idea. This according to a recent article in The Wall Street Journal. According to the article, lower bond yields and swollen equity markets are “sending conflicting signals; the former reflecting the lackluster picture for inflation; the latter hopes for growth.” Further, it says, the high level of global central-bank liquidity is “past its… Read More

Cash Rich Stock Picks

The tendency for major corporations to stockpile cash after the financial crisis seemed like a reasonable strategy, but according to recent data reported by FactSet, the trend hasn’t changed much. In his latest article for TheStreet, Validea CEO John Reese outlines some possible explanations and describes how our guru-based investment strategies (particularly that of Warren Buffett) evaluate a company’s use of their cash. Reese identifies the following high-scoring picks: NetEase (NTES) is a tech company… Read More

Inflation: Maybe Not Today, Maybe Not Tomorrow, But Soon — And For The Rest Of Your Life

Inflation has been tame in recent years. But history shows that’s unlikely to continue forever — and that has major consequences for your portfolio. The chart below from BlackRock shows just how real a threat inflation — and taxes — are to different types of investments over the long haul (h/t to The Reformed Broker for highlighting the chart). As you can see, inflation and taxes eat away at stocks, bonds, and cash, but their… Read More