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To: Seeker of Truth who wrote (33516)	10/22/2000 2:52:07 PM
From: kumar	Respond to of 54805

<<How much cash to hold is a colossal question.>> It sure is! Whilst I can understand some holding x years expenses as cash, I have reason not to hold > 6 months expenses as cash : U see, I still work in a day job, and every month I get a paycheck to pay the bills. Way I look at it, if I loose my job, I sure can find another one within 6 months. This approach allows me to be "always fully invested", so that one day in the future, I may have the luxury of holding multi-year expenses as cash :-) (and still invest in the market) cheers, kumar

To: Seeker of Truth who wrote (33516)	10/22/2000 11:20:58 PM
From: mauser96	Respond to of 54805

That's a very insightful look into cash. Basically, an investor should hold enough cash so that he can free himself from the all too human tendency toward fear and panic at market bottoms. Cash acts as a wonderful insulator, and makes it a lot easier to act rationally rather than emotionally when your stock portfolio is melting like a popsicle in July. Since this level will vary from person to person, it's silly to try to make up some exact percentage. Also, it would depend on how many other sources of income are available to the investor, whether your job is stable, etc.