MENU

Why cash is the best asset for days like today

Investors are reeling today after a particularly bruising day. Some shares like Afterpay Touch Group Ltd (ASX: APT) and WiseTech Global Ltd (ASX: WTC) are down more than 10%. Ouch!

Who knows if today was a one-off or the start of something more prolonged. What is for certain is that it’s days like today that cash is very valuable.

Not only does cash not deteriorate on negative days, but it can be used to buy beaten-down shares. Investors that are fully invested with spare cash will simply have to watch their portfolio fall.

People with a bit of cash on the side have the flexibility to purchase something if they think a particular share or shares are good value.

You can’t know when share markets will crash. That’s why I think it’s a good idea to always have an amount of cash on the side for at least a share parcel or two at all times to buy in a fall.

Investment funds like WAM Capital Limited (ASX: WAM) and Magellan Global Trust (ASX: MGG) are two that can now deploy some of their stockpiled cash.

Berkshire Hathaway had US$111 billion cash at the end of its last quarter – that’s a lot of money it can put to work!

Another important consideration with cash in our personal lives is to have some cash set aside for emergencies. Whether it’s $1,000 or up to six months’ of living expenses, it’s a good idea to keep some cash in-case of an emergency.

Foolish takeaway

Over the long-term shares will soundly outperform cash. However, in the short-term cash can be very useful to snap up some bargains.

If you do have some cash to invest then I’d consider one of these top growth shares which is exposed to the ageing population tailwind, yet fell 4.3% today.

3 Top Shares To Buy After The Crash

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for FY19."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!