Cash is King

Corporate America is doing it, so why shouldn’t individual and institutional investors do it too? In this case, it refers to creating a so-called “fortress balance sheet” that provides protection and downside risk management by holding excess cash and cash alternatives to retain liquidity. The king of this conjectural fortress is cash—often thought of as the core foundation to a strong balance sheet due to the known and consistent outcome it delivers. Holding cash as an offensive tool to take advantage of market dislocations may prove to be a prudent measure and could add nimbleness to an investment portfolio.