The issue of cash holdings generates debate between investors and operators. While some consider it an essential component of a well-planned investment strategy, others believe that it is not necessary to maintain cash within an investment portfolio.
Assess the Role of Cash
Before we go into the issue of cash in the context of an investment strategy, it is essential to assess its role in terms of personal financial planning. It is usually recommended to have the cash available to finance immediate personal expenses. For people who may face sudden expenses in areas such as health or other emergencies, it is advisable to plan and keep funds available in the form of liquid cash.