The older I get the more I think many investors should have a decent chunk in cash, if for nothing else than to make them behave a little better.
Below is a chart that looks at adding increasing levels of cash to a global market portfolio, with tilts. (No trend, etc). Allocation is from our white paper The Trinity Portfolio.
1973-2015
and was chatting with Dan Eagan on Twitter about replacing cash with bonds…so here’s the same returns but using 10 year US Government bonds…notice on a nominal basis the drawdown goes down the more bonds you have, but on a REAL after inflation basis the drawdown actually goes UP the more bonds you have…not what most expect!
