Investment question

**bjl584** · 09-24-2013, 05:02 AM

I keep a fair amount of cash on hand for the same reason as your husband.

**disneysteve** · 09-24-2013, 05:20 AM

Some of our accounts hold a fair amount of cash. Others are fully invested. But it is all part of our overall asset allocation. For example, if I say I want 10% of our money in cash, I don't care where that cash is held. Some might be in my checking account, some in a CD, some in my Roth, and some in my taxable brokerage account.

I think VTI is okay. Obviously well diversified. I'd probably start getting more conservative once college is no less than 5 years out. By that time, you want to start securing what you've accumulated so that it is there when you need to start drawing from it.

**bigdaddybus** · 09-24-2013, 05:25 AM

I am usually in the 10-30% cash range.

yesterday, I bought a couple thousand dollars in SDS calls (shorting the S&P 500). Having cash available keeps options like this available.

**MonkeyMama** · 09-24-2013, 05:26 AM

A prudent asset allocation includes cash. & of course, that is one reason why - to be able to buy up opportunities.

Never invest money you need in 5 or 10 years, depending on your risk level. (Keep in mind you might not need the last year of college money until child is 22 or 23). I have a 10yo and I have not decided for sure. For several reasons, will probably just leave invested. (College is inexpensive; we used our "college money" towards our first home. So I expect something like that to be likely. & since it is not a lot, I think we could come up with other cash in a down turn. My strategy would be completely different if I thought we would actually spend a lot of money on college. Around here, college is a good deal but housing - without roommates - is a beast. Housing during college will be no big deal).

**kork13** · 09-24-2013, 05:30 AM

I keep a small cash position for that reason, but at present it's quite small... Perhaps only 1% of my taxable investments. I'm slowly building it up by $50/mo, but I've got other savings/investment priorities right now (plus I view alot of assets as over-priced). This cash position is mostly for speculative investments. My plan for it right now is to build it up, and at some point start picking a few stocks & ETF's as my "pet projects"... so far, I only have 1 (an ETF). My plan for this side-pot is to never let grow above 5-10% of my taxable investments (which presently only makes up ~30% of my total invested assets). With that said, if the broad markets go down notably, I may use some of that cash to buy my "normal" MF's & take advantage of the low prices. But again, that's still speculative in nature, so the cash position maintains its purpose there too.

**feh** · 09-24-2013, 05:56 AM

Originally posted by LivingAlmostLarge View Post

I was looking over our investments and I realized that we carry cash in our investing accounts about 10%. Does anyone else do this? My DH does this so he can buy something he wants without selling something else.

Second question we chose VTI for our kids investment education accounts. If it matters they are 3.5 and 1. We've just dumped it straight in there. Is this a good strategy? When should I rediversify and put it into something more conservative?

We don't do this. 99% of our money is in mutual funds/ETFs. Having cash set aside for "buying opportunities" is just market timing.

I think it's fine to hold some cash, but it should be considered part of your fixed income allocation. As long as you're following your asset allocation it's ok, as long as you understand that you're losing money to inflation.

Given how young your kids are, 100% VTI is probably ok. Ideally, you should probably have 10-20% in bonds, but it's probably not necessary (yet).

Investment question