Cash rarely gets much attention as an asset class, but Fred Hubler argues it deserves a real look, especially with interest rates rising and markets volatile. He notes some advisors may be reluctant to recommend it since it doesn’t generate commissions or fees the way other products do.
He defines cash broadly: savings accounts, money market accounts, and shorter-term CDs, all of which typically offer lower returns than stocks or bonds but come with lower risk and greater liquidity. Citing the Investment Company Institute, Hubler notes total money market fund assets rose by $30.28 billion to $5.28 trillion for the week ending April 12, with government funds up $26.75 billion, prime funds up $3.33 billion, and tax-exempt funds up $198 million.
In this rate environment, holding cash isn’t playing it safe out of fear – it’s a legitimate strategy.
See why cash may deserve more of a role in your portfolio, on Forbes, Cash Isn’t The Most Exciting Asset, But It Belongs In Your Financial Planning.