Cash question

Saul,

First thank you for sharing your investing prowess with the world. You have personally given me the courage to hang on to stocks I otherwise might have sold too early.

My question is in regards to your cash position. The knowledge base says that:

“I’m usually nearly 100% in stocks, and only rarely and briefly as much as 5% in cash. I have a couple of small accounts in which I can buy on margin, but my amount of margin is rarely as much as 4% or 5% of my total portfolio.”

I know in several posts in the past you talked about “segregated cash” that you had set aside for your family. Does this 5% include this segregated cash? In other words, is 5% the maximum of all your cash? Or is this segregated cash not included in that 5% figure?

Thanks in advance.

Peace,
Dana

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"Saul…My question is in regards to your cash position. The Knowledgebase says that: “I’m usually nearly 100% in stocks, and only rarely and briefly as much as 5% in cash. I have a couple of small accounts in which I can buy on margin, but my amount of margin is rarely as much as 4% or 5% of my total portfolio.”

I know in several posts in the past you talked about “segregated cash” that you had set aside for your family. Does this 5% include this segregated cash? In other words, is 5% the maximum of all your cash? Or is this segregated cash not included in that 5% figure?

Hi Dana, I’m currently 100% invested (0.02% in cash). I have no margin and haven’t had any for probably a couple of years at least. When I say 100% invested that means that all the money I intend for investing is currently in stocks. The money that I segregate or remove from investing isn’t sitting around waiting for a better price. It’s money that I’ve removed from the investing pile permanently. Why? Because I’m an old guy. I don’t have any need to pile up more and more money and I feel more secure with a chunk set aside for any family emergency, and for living off if necessary in case of a unanticipated financial meltdown. Even if my portfolio were to drop 30% or 40% none of that money would go into buying stocks. That would contradict its primary purpose. I hope that that helps.
Best,
Saul

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Thanks for taking the time to clarify that for me, Saul. Everyone’s situation is different but I believe every investor should have a plan B.

Peace,
Dana

Hi Saul,
Thanks for everything you do. One more question as I am very close to retiring. For your segregated money, how many months or years of expenses is that worth? And if that isn’t relevant because of your net worth, how much money did you have set aside back when you first retired?

I am trying to get a handle on a timeframe to keep cash so i am not worried about pulling money out at a bad time.

Thx again,
Randy

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Hi Saul, Thanks for everything you do. One more question as I am very close to retiring. For your segregated money, how many months or years of expenses is that worth? And if that isn’t relevant because of your net worth, how much money did you have set aside back when you first retired?

Hi Randy, I’m afraid I can’t help you there. It’s a question that each person has to decide for him or herself, depending on your tolerance for risk, your family situation, other sources of income, age, etc, etc. Just remember that the segregated money is NOT for plowing back in when you think you have a bargain. It’s set aside permanently for emergency living-off money.

Also this is really NOT a topic for this board (which is for discussing high-growth stocks), and is OT, so let’s stop this subject thread here, with anyone else wanting to respond to Randy doing it off-board…

Thanks.

Saul

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