Re: Why do we need cash?
 

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My cash inside of my portfolio is earning some interest, but I'm sure there's better safe investment that earns more interest, like some bonds.

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I'll just note, that you didn't ask what was a better use for the 5% cash... you just asked why portfolio strategists recommend it... and you received several correct answers to that question!

Personally, if you are young, my recommendation is to be fully invested!

Re: Why do we need cash?
 

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I was talking about the cash within MY portfolio, not within some mutual funds.

Soh

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I suppose it depends how active you are in trading. If you sniff around a lot for good deals, it's definitely good to have quick cash around for a moment's trading notice, just like mutual funds. If you're a buy and hold type and young enough, it seems more EV to invest.

Re: Why do we need cash?
 

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you can't use a debit card or stock to buy drugs and prostitutes.

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who said you have to pay prostitutes?

Re: Why do we need cash?
 

"If you're a buy and hold type and young enough..."

That's me. The recommendation fo having 5% cash came from IRA site, which means people are usually buy and hold (I think,) so I was wondering why.

Soh

Re: Why do we need cash?
 

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Personally, if you are young, my recommendation is to be fully invested!

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Are you saying that someone young, like myself (23), should invest all they have saved? I have ~6K in an ING account currently and I'm trying to decide if I should start investing (I've done quite a bit of stock trading research). The real question is how much should I take from savings?

Re: Why do we need cash?
 

You should have a 3 to 6 month emergency fund in savings. Enough for you to pay the rent, pay for food, other unescapable espenses for a few months if you lost your job. 6k is probably enough unless you live in NYC or the like.

Re: Why do we need cash?
 

[ QUOTE ]
Are you saying that someone young, like myself (23), should invest all they have saved? I have ~6K in an ING account currently and I'm trying to decide if I should start investing (I've done quite a bit of stock trading research). The real question is how much should I take from savings?

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Just to clarify, I am suggesting that you should be fully invested with all funds that you have allocated to your investment "bankroll"... and you should be striving to add to this every month, as much as possible.

Your poker bankroll should be actively working for you too.