Money and Finance
- With Stocks So High, Should Investors Move To Cash?
Link to article: With Stocks So High, Should Investors Move to Cash?As stock indexes hit record highs, nervous investors increasingly face a difficult choice: Do they keep betting as heavily on the markets, or do they move more money into cash? The...
- Cash Gives The Private Investor An Edge – By Merryn Somerset Webb
Fund managers don’t like holding cash, but individual investors can and should I wrote last week about the many ways in which traditional long only fund managers are institutionally prevented from performing as well as they should – given their above-average...
- Mutual Fund Observer: April 1, 2013 Commentary
Found via Abnormal Returns. One addition I'd add to the list in the commentary is the Martin Focused Value Fund (MFVRX), which I believe is a little over 90% cash right now. For those interested in other managers who’ve followed Mr. Cinnamond’s...
- Tradewinds - David Iben’s July 2011 Commentary: Hard Times And Nursery Rhymes
Link to: Hard Times and Nursery Rhymes - by David Iben ………...Excerpt: Returning to Fortune’s Formula, many pages were devoted to the pros and cons of geometric averaging (vs. arithmetic) and to the Kelly Criterion. While we all understand the...
- Fpa’s Rodriguez Flouts ‘small Mind’ Investor Rules To Top Funds
Robert Rodriguez ignores most rules of the mutual-fund industry, an approach that’s helped him beat all rival managers over the past 25 years. Rodriguez, who runs the $1.1 billion FPA Capital Fund, puts most of his money into two or three industries...
Money and Finance
A Few Good Reasons to Hoard Some Cash Now - By Jason Zweig
The stock market is near record highs. More money came into U.S. stock mutual funds the week of Oct. 23 than during any other week since 2007. Initial public offerings like Twitter are booming.
So have you considered keeping more of your assets in cash?
At first, the question sounds crazy. With interest rates and inflation at current levels, holding cash virtually guarantees you will suffer losses after accounting for the erosion of your purchasing power. Major money-market funds yield an average of 0.02%, according to Crane Data. As a result, you will need a year to wring $2 in interest out of a $10,000 account. And by then, inflation will have taken $120 of your money at the 1.2% annual rate reported by the Department of Labor for September.
But cash doesn’t earn its keep on yield alone. All investors should realize that cash can be priceless, even when its yield after inflation is negative. Cash “is an option on the future,” says Abhay Deshpande, a portfolio manager at the New York-based First Eagle Global and First Eagle Overseas mutual funds, which have $58.4 billion in combined assets.
Having a cushion of cash can help you stay invested when stocks tumble — as they surely will sooner or later. And a cushion can enable you to do what cash-poor investors find almost impossible: Buy stocks and other assets as bear markets turn them into bargains.
There are worse fates than posting losses on cash after inflation, says Dowe Bynum, a portfolio manager at the Cook & Bynum Fund in Birmingham, Ala. “Putting a lot of money to work in overpriced, inferior businesses — that’s going to end up way more destructive to your capital than sitting in cash for a while with a negative return,” he says.
Mr. Bynum and co-manager Richard Cook haven’t been able to find a significant new stock position to add to their fund in more than a year. So cash has climbed to roughly 43% of the fund’s $135 million in assets, up from 26% in 2011.
- With Stocks So High, Should Investors Move To Cash?
Link to article: With Stocks So High, Should Investors Move to Cash?As stock indexes hit record highs, nervous investors increasingly face a difficult choice: Do they keep betting as heavily on the markets, or do they move more money into cash? The...
- Cash Gives The Private Investor An Edge – By Merryn Somerset Webb
Fund managers don’t like holding cash, but individual investors can and should I wrote last week about the many ways in which traditional long only fund managers are institutionally prevented from performing as well as they should – given their above-average...
- Mutual Fund Observer: April 1, 2013 Commentary
Found via Abnormal Returns. One addition I'd add to the list in the commentary is the Martin Focused Value Fund (MFVRX), which I believe is a little over 90% cash right now. For those interested in other managers who’ve followed Mr. Cinnamond’s...
- Tradewinds - David Iben’s July 2011 Commentary: Hard Times And Nursery Rhymes
Link to: Hard Times and Nursery Rhymes - by David Iben ………...Excerpt: Returning to Fortune’s Formula, many pages were devoted to the pros and cons of geometric averaging (vs. arithmetic) and to the Kelly Criterion. While we all understand the...
- Fpa’s Rodriguez Flouts ‘small Mind’ Investor Rules To Top Funds
Robert Rodriguez ignores most rules of the mutual-fund industry, an approach that’s helped him beat all rival managers over the past 25 years. Rodriguez, who runs the $1.1 billion FPA Capital Fund, puts most of his money into two or three industries...