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My portfolio is cash-heavy these days, but I don't believe a crash is coming, I'm just not comfortable being fully invested at the moment; and I hate that becau

My portfolio is cash-heavy these days, but I don't believe a crash is coming, I'm just not comfortable being fully invested at the moment; and I hate that because the cash is losing purchasing power every quarter. I get the feeling that investing in a quality company with a solid balance sheet is the better long term risk proposition because even if it goes nowhere for 10 years, what are the chances that my savings are going to grow in purchasing power? Probably zero. This market has made me more comfortable with risk than I probably should be, but that is another reason why I refuse to go "all in", to protect me from myself. :D

potamic 5y ago
> I get the feeling that investing in a quality company with a solid balance sheet is the better long term risk proposition From a risk perspective, you are better off investing in an index. Any individual company might stagnate or go bust, but an index is highly diversified and constantly rebalanced to track the best performing companies. The risk reduces even further as your horizon increases.
- zivkovicp 5y ago
  That's true, and good advice. I've only used index investing to get exposure to specific markets or segments where I find it difficult to do decent research, but you're right that it's a better way to park funds over a longer term.
room505 5y ago
The best way to improve your odds of success is to stay invested over time, no matter when you start. https://www.schwab.com/resource-center/insights/content/is-there-perfect-time-to-invest https://www.schwab.com/resource-center/insights/content/is-t...
rufus_foreman 5y ago
>> the cash is losing purchasing power every quarter I Bonds are paying over 7% right now. You are limited in the amount you can buy but could buy $10,000 now and $10,000 next year (i.e., in a couple weeks) plus another $5,000 if you are getting a tax refund. You've got to lock your money up for a year but worth looking at if you've got money sitting around in a savings account that you don't need next year.

potamic 5y ago

> I get the feeling that investing in a quality company with a solid balance sheet is the better long term risk proposition From a risk perspective, you are better off investing in an index. Any individual company might stagnate or go bust, but an index is highly diversified and constantly rebalanced to track the best performing companies. The risk reduces even further as your horizon increases.

zivkovicp 5y ago
That's true, and good advice. I've only used index investing to get exposure to specific markets or segments where I find it difficult to do decent research, but you're right that it's a better way to park funds over a longer term.

room505 5y ago

The best way to improve your odds of success is to stay invested over time, no matter when you start. https://www.schwab.com/resource-center/insights/content/is-there-perfect-time-to-invest https://www.schwab.com/resource-center/insights/content/is-t...

rufus_foreman 5y ago

>> the cash is losing purchasing power every quarter I Bonds are paying over 7% right now. You are limited in the amount you can buy but could buy $10,000 now and $10,000 next year (i.e., in a couple weeks) plus another $5,000 if you are getting a tax refund. You've got to lock your money up for a year but worth looking at if you've got money sitting around in a savings account that you don't need next year.