Why Cash Is An Important Part Of Your Portfolio

in LeoFinance2 months ago

Hey Jessinvestors

If you've read any of my posts over the past 2 years or so, you'll know I have a growing disdain for cash, but it doesn't mean I don't see the value in it. I hold cash, not as store fo value that's for sure, but a unit of account and network it's a great toolbar none.

Cash has it's the purpose it's a medium of exchange, it as near-infinite liquidity, and is hardly ever denied in terms of exchange. It's accepted almost everywhere; there are very few nutters who would turn down a crisp bill or my plastic card.

I need cash, we all need cash

I need cash for certain things, like bills and living, as everyone else does, but am I willing to hold something that's going to zero?

Not a chance!

Every country is in a different stage of the inflation and debasement race and for myself here in South Africa, you need to be a damn Olympic sprinter to keep up. I've had to eat losses for years and take the knock to my savings since around 2016 when I discovered Bitcoin.


Keep dry powder on hand

If you have a job, a business or investments that are kicking off free cash flow and you're not ready to reinvest or looking for new opportunities and don't want to pull the trigger sure you can hold cash.

That's what I do, I build a little reserve each time, I leave it in a money market, or savings account to cover my banking fees and reduce the damage from inflation slightly as I wait for a good deal.

As I've mentioned before I am starting to take a back seat in the stock market as I don't have the temperament for what's going on here. The volatility is not worth my stress, and I'm going to need a serious repricing of assets before I jump in.

I could be wrong, and stocks continue to surge while cash crumbles, but it's a risk I am willing to take. Cash also allows me to invest in other opportunities while I wait. It could be something simple, like buying products that are liquidated form businesses and reselling them.

Having that dry powder on hand, to pull the trigger on deals gives you so much more confidence, you don't need to rely on instant finality for many of these deals, and the time it buys you is vital in getting the best return.

Kicking off cash flow means you can stack sats

Let's face it the world runs on debt, debt to some is as good as cash, cash is in itself a debt instrument. However, it's not about having cash but rather cash flow. If you have a job, a business or investments dropping regular cash flow into your pocket, you can use some of that to stack sats.

While others are paying off mortgages, auto loans and credit cards, you convert your cash into Sats, or rather that's what I've been doing.

Cash is great in a deflationary trade

The world is a place of nuance, and while inflation rules the roost on many things you may want to buy, there are deflationary forces at play. If you find a market where deflation is taking hold cash is an awesome tool, you can use it to pick up assets as the relative buying power of your cash keeps rising against these assets.

So in short, I don't like cash, but I do value what it offers me!

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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Yes! We need cash but it's wise to keep most of our finances in investments rather than just holding them or storing them as Fiat.

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Oh yes in this environment for sure, but being too illiquid is also bad because you cannot take up opportunities, so there's a risk-reward ratio to holding cash too.

It then boils down to having a good knowledge of financial management.

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Mixed basket of apples called for, some green and red.

Green to continue living with most financial institutions not having caught up yet.

Red and risky invest at the moment, will take us into for the future, keep growing, with time more will realize and start to use.

Lol, you distilled it so well, we also need to toss out some rotten apples and try not to have the whole bunch ruined. The basket needs to be checked regularly

Most definitely, powers that be eat into green quicker than red so know which you prefer.

I’m preaching to stay liquid in this market. 25%-30% cash ready for the discounts when they come.
Could be a market crash as much as business opportunities as you perfectly mentioned

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I personally don't have the stomach for that level of short term volatility so I stay out of it, lol pick your battles and I know the ones I am most likley to lose

I am a Jessie... Is this like the in life we do not have names, fight club style? I found some cash I forgot about on Valr and turned them into ADA now I need to find new cash but with Binance making it so easy to deposit a quick R100 or so vs our local exchanges being dimwitted it is nice to be like ooh I like that token lemme get just a bit more pud.

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LOL basically yes, doing anything on HIVE is a pretty exclusive club since no one can fucking find this place. Lol i've been picking up a little PUD every day R100 here R100 there, I mean since I can't drink a beer, go outside or have a life might as well just by coins instead of letting these rands rot in my pocket

I'm keeping cash back now since I can't buy as many sats as I used to and have reached a level I want to with crypto. Want that money mobility for when the time is right to invest again. Don't want to be caught short!

If we are ever lucky enough to get another 80% retracement I am letting off a damn bazooka no fear whatsoever on buying up that falling knife

Me too! Going to be smashing that buy button like no tomorrow if we go back below 5 figures!