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Schwab forces you to keep at least 6% of it in cash, which is an incredibly bad idea and does do significant damage to your long-term returns. The rumor mill i
by gergles 12y ago
Schwab forces you to keep at least 6% of it in cash, which is an incredibly bad idea and does do significant damage to your long-term returns.
The rumor mill is that this is how Schwab makes profit instead of advisory fees.
- matwood 12y agoDo you have any backtest links that show a small cash position 'is an incredibly bad idea'? A small cash position is another diversification strategy. As your portfolio increases in value, taking some profits to cash and then having it available on the dips may be perfectly valid. Buffet himself has called cash the never expiring call option. EDIT Schwabs CEO defends small cash position. http://www.aboutschwab.com/press/statements/response-to-blog-by-wealthfront-ceo-adam-nash http://www.aboutschwab.com/press/statements/response-to-blog...