What’s Wrong with Cash?

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.





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!