How can cash be king with interest rates hovering around zero?
Shouldn’t this headline read, “Forget About Cash, Its Return Stinks”?
Cash has a solid place in your portfolio, even with interest rates near zero.
How to profit from cash. Modern portfolio theory recommends keeping a certain percent of one’s assets in fixed investments. These fixed investments include, bonds, but also cash and cash equivalents.
This is because holding cash will normally give you a small interest payment along with stability as stocks and bond values teeter-totter. But is it still a good idea to hold cash when there is virtually no interest paid on cash? Yes.
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