3 Investors discuss their approach to holding cash in their portfolios


In this segment of Backstage Pass, registered on November 17, Fool contributors Rachel Warren, Travis Hoium and Connor Allen discuss their approaches to building cash positions while regularly buying stocks.

Rachel Warren: We got a question from ProShopGuy following our discussion of 100% investing in stocks. He says, “When you say you are 100% in stocks, does that mean you have no cash position in your portfolio, so you invest immediately when you get new capital or when you don’t? don’t worry about high market valuations. “

Well I will say for me personally when I say that I mean my investment portfolio is 100% stocks.

I also work, separately from that, to build up my cash flow both for a rainy day and to reinvest. I’m also used to reinvesting my dividends, which is easy to do. I invest in the Robin Hood Platform. That’s what I meant by that. And you?

Connor Allen: Personally, I take the old David Gardner approach. I stay 100% invested all the time in any new money that comes in. I might accumulate money if I’m a little concerned about some different valuations, but I stay 100% invested unless new cash comes into my Account. I sometimes accumulate cash, but I never sell anything to hold cash.

Rachel Warren: Absoutely.

Travis Hoium: Yeah. I usually do the same. As I build wallets for my kids, we just add them on a monthly basis. Then it’s like once you have enough to buy a position in something or something piques my interest.

I don’t intentionally keep a lot of money I guess that’s what I’m trying to say. But as that builds over time, I’m looking to add that way. Try to keep as little money as possible, but don’t be against it either.

Rachel Warren: No, for me, I think it depends on each investor, but for sure, continuously staying invested in the stock market is very important. I think this has been particularly highlighted in recent weeks.

In terms of concerns for high-end ratings. For me, I focus more on the business. I’m willing to pay a premium for a business that I believe in and think is a great business. And I also think this is where fractional investing, I’ve talked about before, might be a good thing if there is a company that is just the same price, like Shopify for [laughs] For example, this can be a great area where fractional investing can come in.


Comments are closed.