Cash Transfer | Vanguard


Maria Bruno: An opportunity cost to stay in cash is either having too much cash for your portfolio or staying in cash for too long. It may feel safe but, basically, you are on one side and you are predicting market participation. So you can feel that you are safe because you are saving your money. However, when you think about inflation over time, you are actually reducing your purchasing power because your portfolio is not able to grow with inflation. So it’s a huge risk over time. So this would be my biggest warning when it comes to staying out of the market.

The other thing is the thing that is preventing you from exiting the market, which will make you feel comfortable to return to the market as an investor. And, basically, it’s market time.

Tim Buckley: Maria, I would say that the person who is thinking of taking cash, be comfortable with the quality of life that you are living better than your money, you are going to cash because you want to take risk from the table, and, look, you will lose purchasing power over time. But if it helps you sleep better at night and you feel comfortable that you’re living your way down and you’re going that way because your money will go down over time with inflation, then, hey, we’re not going to say you don’t do it. But, Maria, you have come up with some great points about why it is only for people who are very good and living under their means.

Important information

All investments are at risk, including the potential loss of money you invest. There is no guarantee that any specific asset allocation or combination of funds will meet your investment objectives or give you a certain income level. Diversity does not guarantee gain or protect from loss.

This webcast is not only for educational purposes but also considers other issues that may be important in your particular situation or investment decision. We recommend that you consult a tax or financial advisor about your personal situation.

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