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Why Hold a Cash Position?

The most frequent question I receive from clients is this: “Why hold a cash position?” Unfortunately, today’s investor is so used to large and trouble-free returns that the idea of capital preservation is scoffed at. The question I would ask back is, “Why, with so many uncertainties on the horizon, would you not want to hold a meaningful cash reserve?” Remember, cash is an asset class. And when things turn bad, it is the most important asset class.