Comments on: Millionaires Invest in Cash But Watch Stocks

By: empty spaces

empty spaces — Sat, 21 Oct 2006 01:10:49 +0000

i have about 25% of my network in cash.

its probably going to stay that way. i’m not looking to get more than 4-5% inflation return on it. its just a hedge against life’s unexpected accidents.

plus if something happens to me i feel comfortable knowing that for a whole year i dont need a job just to pay the rent and buy groceries.

By: terry

terry — Thu, 19 Oct 2006 20:31:38 +0000

And the poor fork over their money to HSBC.

Is this a great country or what?

By: saving advice

saving advice — Wed, 21 Jun 2006 00:11:46 +0000

I also think that the affluent tend to spend more and therefore need a higher cash holding than others. Still, and interesting study…

By: Flexo

Flexo — Tue, 20 Jun 2006 16:04:33 +0000

Samewriter, right, but to evaluate, one would have to look at the trend of cash positions over time to see if we are in a period of reduced equity investment among the “mass affluent” or if there’s no significant deviation.

If we are in a period in which the affluent have significantly less in equities and more in cash than “average,” then there’s an opportunity to invest in equities and wait for the affluent to return to the mean.

If there has been no significant deviation over time, then it would seem that the affluent are “conservative” compared to advisors’ predictions, as you say.

By: samerwriter

samerwriter — Tue, 20 Jun 2006 15:34:39 +0000

I’m not sure it’s correct to conclude that the affluent are waiting for the right time to put their cash into the market. I think it’s likely that they are conservative in their investment approach, and like to have a substantial cushion to weather bad times.