Is there a benefit to holding cash in portfolios? Here, strategists from Wells Fargo Investment Institute explain the role cash can play in investments.
The right amount of cash doesn’t have to do with the cash in your wallet. The questions and answers below, provided by the strategists at Wells Fargo Investment Institute, can help investors know when cash may be an option—and when it may be too much.
This information is provided for educational and illustrative purposes only.
Diversification and dollar cost averaging are investment methods used to help manage risk. They do not guarantee investment returns or eliminate risk of loss in a declining market.
All investments are subject to market risk which means their value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors due to numerous factors some of which may be unpredictable.
An investment in money market mutual funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at one dollar per share, it is possible to lose money by investing in the fund. Bank products offer fixed or variable rates. Principal is fixed and may be insured. Withdrawals prior to maturity may be subject to penalties.
Opinions represent WFII’s opinion and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. WFII does not undertake to advise you of any change in its opinions or the information contained within. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. The material contained herein has been prepared from sources and data we believe to be reliable but we make no guarantee to its accuracy or completeness.
Wells Fargo Investment Institute, Inc. (WFII), is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, NA., a bank affiliate of Wells Fargo & Company.