Cash Can Be Trash

Are you keeping too much money in cash because you’re waiting for the “right time” to invest? In this episode, Tom and Don explain why market timing has historically been one of the costliest investing mistakes—and why even the worstinvestment timing has dramatically outperformed sitting on the sidelines.

They also answer listener questions about immediate annuities, I Bonds, portfolio allocation, sequence-of-returns risk, and why using whole life insurance as an investing strategy is a bad idea.

00:05 – Why so much money is sitting in cash
03:21 – Americans hold over $20 trillion in cash-like accounts
05:08 – The enormous cost of waiting to invest
07:27 – Morningstar’s “Mind the Gap” study and investor behavior
10:41 – Cash is trash (except when it isn’t)
11:41 – How to earn more on your bank savings
15:55 – Should immediate annuities count as bonds in your portfolio?
17:23 – I Bonds vs. TIPS and inflation protection
19:50 – Is 20% cash too much in retirement?
20:43 – Whole life insurance for sequence-of-returns risk?
22:28 – Why the advisor’s recommendation raises red flags
23:39 – The real way to manage sequence risk in retirement

Questions? Comments? Click!