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Investors flee to cash during times of trouble. However, far from being a safe haven, cash is potentially the most dangerous asset class for investors, luring investors into bigger psychological bubbles than even tech stocks and housing have historically.
We recently wrote about why investors might want to consider holding bonds rather than cash, even at current low and negative yields (see Why on earth would you hold a bond with a negative yield?). A recent article (see Journey of Cash by Alex Gurevich) and further investor questions have inspired us to think a bit more specifically about cash and its merit (or not!) as an asset class in a well diversified portfolio.
Hold cash for known near-term purchases and an emergency fund
