Key insights
- The author advocates for holding 15-25% cash due to stretched valuations and increased uncertainty. This strategy aims to capitalize on market dips and reduce stress during volatility. While a single investor's opinion, it reflects a cautious sentiment that could signal a broader shift away from fully invested strategies, potentially leading to reduced equity demand.
After managing investments through different market cycles, I’ve moved away from being fully invested 100% of the time. I now keep 15-25% of my liquid capital in cash or short-term Treasuries. This allows me to deploy capital during meaningful dips without having to sell existing holdings at a loss, and it also helps me stay calmer during periods of high volatility. Being fully invested felt like the disciplined approach for a long time, but in the current environment with stretched valuations and increased uncertainty, it started to feel more like unnecessary risk. Curious how others are handling cash allocation right now. Are you staying almost fully invested or keeping a decent cash buffer?