Smart Cash Management: Can I Just Withdraw From My Bond Portfolio?
We always pay attention to cash management as we believe most investors and savers have been ill served by banks or brokerages for their cash. Many people simply ignore and dismiss this ‘unsexy’ part without knowing that some companies rely on cash to make most profit (see, for example, July 8, 2019: Surprise! Brokerages Make Most From Your Cash, Not Commissions).
In this newsletter, we look at one of the simplest ways to handle cash and concludes that in many scenarios, it works well enough.
Handling short term ‘safe’ investments
Roughly, one can divide investments into two parts: long term stock-type risk investments and short term bond-type ‘safe’ investments. Notice ‘safe’ is just simply a relative word: it does not imply bond or fixed income investments to be safe, but just relative to stocks, they are safer.
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