How Much Cash Should You Hold in Your Portfolio?

In this episode of Focus Perspectives, Chief Investment Officer Kevin Grogan provides insight into a common question from investors – what's the right amount of cash to have in my portfolio? As cash is the safest investment and can easily be used for other needs, it makes sense that it has historically provided lower returns than stocks and bonds. To make sure your portfolio will outpace inflation over the long term, a good rule of thumb is to hold between one to six months of living expenses in cash and allocate the rest to stocks and bonds based on your comfort level. Speaking to a wealth advisor can also help determine the amounts that make sense for your financial goals.

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