I would count funds sitting in a bank account at zero interest as "cash" and not part of my fixed income allocation.There is certainly no reason not to count cash sitting at no interest. It is still an asset on which the return is zero just now. The volatility is also zero. There are assets where the return at some time or another is less than zero and we still count them. A reason one should count it is to be accurate regarding how one's assets are deployed with respect to risk and return.
I vote for 54/46 as long as the $300 in "cash" is not sitting in a non-interest bearing checking account. I consider funds in a HYSA or MMF the same as short-term Treasuries for the purposes of my asset allocation. It's just the very very short end of my fixed income exposure.
Disclaimer: I count my nearly zero interest checking account as a fixed income asset. It isn't very big though.
Statistics: Posted by MikeG62 — Sun Dec 08, 2024 10:37 am — Replies 11 — Views 497