Quote:
Originally Posted by Manhattanboy
How much cash as a percentage of a portfolio (excluding real estate) is appropriate for a person five years from retirement? I am quite risk adverse and am looking at committing more funds to the market but extremely nervous.
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There is one view that you should have around at least 3 years of expenses in cash and 10 to 15 years of expenses in fixed income.
The idea is that in the event of a downturn, your cash and fixed income can be used while your equities remain untouched and hopefully recover, but one often overlooked issue is how you (or whether you) replenish the cash and fixed income and when you do it. And, of course, if you are drawing off your cash and fixed income, your overall allocation may drift.
Which is to say, your portfolio is your portfolio and you own what you own, so if you want to hold cash, maybe determine the reason why and then think if the rationale is truly accurate.
You might find this website to be of interest:
https://earlyretirementnow.com/
It is a ton of information and can be overwhelming, but it worth a read.
As is this Canadian-centric forum:
https://www.financialwisdomforum.org/