There have been numerous times in this presidential cycle where Donald Trump has said something and I’ve cringed. A political analyst that I was listening to recently said it best — Donald Trump is an astute business operative, but with the remarks he makes, do we really want him as the leader of our country?
Trump has struck a nerve with many people. He speaks freely and is blatant about the ills that plague our nation.
The amount of cash in one’s portfolio evokes a similar adverse response in investors. As Donald Trump is to voters, cash is burdened with low returns, lack of space for other investments and a shortage of cash flow. All of these combined garner cringes from investors.
Keeping Cash at Hand to Secure Swift Investments
Yet cash has its place, just as Trump has demonstrated his ability to be business-savvy. Cash provides the opportunity to move quickly and pounce on an investment. In the recent downturn, we took advantage of two quality stocks with decent dividends, and one closed-end fund with favorable cash flow. If we were fully invested, this would not have been possible. But with cash at hand, we were able to purchase Johnson Controls (JCI), Symantec (SYMC) and Aberdeen Global Income (FCO).
Johnson Controls manufactures building management systems for heating ventilation and air conditioning. Symantec provides security software for computers, and Aberdeen Global Income invests in foreign government bonds predominantly in Canada, New Zealand and Australia as of recently. Each of these stocks have received quite a scare in the downturn, all in great excess of 20% or more.
All three of these companies have valuable products and initiatives in place for sustained operations. Consequently, having cash on hand to purchase these opportunities was an advantage for our company.
While cash does not provide a return, and people typically do not want to pay a fee for holding onto it, cash does serve a purpose: to take advantage of the opportunities that arise in an ever-changing market.
So, the next time you see cash in your account and automatically produce a gag reflex, take a second look at the opportunities cash may provide for your account to promote and stabilize your current and future financial well-being.