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|Subject: Re: Wht Say You All Here....||Date: 7/17/2013 12:29 PM|
|Author: gdett2||Number: 72631 of 76237|
Cash doesn't earn anything and cash *loses* 2%-3% a year due to inflation
How long is "a few years"?
I normally keep around 3 years in passbook savings. During our last event, that got us through without selling stock at depressed levels. Over 3 years, we drew-down to about a 1 year level remaining. I had dividend reinvestment turned off in early 2007(as it is now). When the valuations for my holdings is too far beyond fair value, I hold dividends. I look for opportunities to reinvest them. They also are used to replenish the cash reserve which happened in the down-turn.
Our cash reserve is "outside" of our portfolio, not considered for asset allocation which today sits at 79%/21% stock/interest bearing. We have 0.19% in bonds(BIV) and 0.07% cash(just moved to the interest bearing accounts).
I do realize the cash is a "lost asset" as far as investing goes. One of my primary concerns is if I die suddenly, DW has a long letter on how to handle our investments, what to sell and how to manage the rest, etc, etc. If she does nothing for a while, all will be fine. She does some of the transfers to checking so she is Ok with that. Once she gets her feet back under her, she can deal with the investments and all. I looked into CD laddering but the simplicity of passbook won.
Passing up some gain is fine with me. The remaining investments have been more than adequate to meet our income needs.
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