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Strategies & Market Trends : Dividend Growth Investing and chit chat. -- Ignore unavailable to you. Want to Upgrade?

To: LegitDGIguy who wrote (1430)	12/6/2021 4:12:57 AM
From: Chairo Kiisu Ichiro	4 Recommendations Recommended By cemanuel DaveVK luvdividends suncoaster Respond to of 2146

RE: How important is having extra cash? => It depends. I want (and have) extra cash outside my portfolios -*as a contingency reserve- that I neve*r invest. In my experience having sufficient immediately available cash stops many (most?) problems before they can grow into crises. However, I don't accumulate unspent cash in any of my portfolios. In part 'cause: I have and use a purchase plan[1] for each portfolio so I rarely have more than $5 unspent[2]. In an inflationary environment (which we are experiencing), cash is (in my opinion) a wasting asset[3], so I don't hold it in any portfolio any longer than absolutely necessary. Best wishes, Kiisu 1. I decide (often months in advance) what companies to buy. As dividends come in, I know how that cash will be spent. When I trim (or sell) I use a custom spreadsheet to determine what and how much to buy. I use the spreadsheet to run cost/income scenarios (which helps me increase potential annual income or at worst, minimize the hit to potential annual income). 2. When I run my accounts at the end of the month (or end of quarter) at times I'll show a balance of a few hundred dollars ... dividends that arrived after the close of the last trading day of the period (it's how Schwab does business). However, that cash is normally spent sometime during the first day of the following period. 3. A wasting asset is an asset that irreversibly declines in value over time. en.wikipedia.org

To: LegitDGIguy who wrote (1430)	12/6/2021 5:43:24 AM
From: cemanuel	3 Recommendations Recommended By DaveVK LegitDGIguy onlywords Respond to of 2146

"How important is having extra cash?" When I started I thought all the advice about "dry powder" was sound, particularly having available money for a pullback. Then I started looking at what cash sitting there was doing for me. Nothing. There are a lot of things I don't need to do in the market. Among these are: 1) Make a killing 2) Find the next "hot stock" that may turn into a 100-bagger 3) Increase my net worth markedly above market returns Once I got into dividend investing the number one thing I needed to do was increase my cash flows and I had decided that my cash flows would come from dividend income. So I stayed full invested and, once transaction fees went away, every time I got $1k from dividends, would buy with it. Cash is lazy money. I want my money to work for me. Plus leaving cash sitting there means I think I know when the market will pull back - but if I always have dry powder I can't spend it all even then. With dividend-payers, I just put it towards generating more dividends. I won't say I don't worry at all about what the market is doing. I just don't worry about it much. Right now I'm going into retirement and I do see cash as useful there - I don't want to be forced to sell something when I don't want to. So I've been building it since June. But I cringe a little whenever the market pulls back, like it's been doing the last few days. Hurts me when things go on sale and I have lazy money sitting there but it's lazy money with a purpose. This is different from my emergency fund which is not counted as part of my investments - it is, sort of, but not to put in stocks.

To: LegitDGIguy who wrote (1430)	12/6/2021 6:00:44 AM
From: 5-88	Respond to of 2146

RE: How important is having extra cash? -------------------------- I always keep six-digits in Cash and as I deplete it - I rebuild it back to six-digits. So I'm always ready to pounce should a good deal drop in my lap.

To: LegitDGIguy who wrote (1430)	12/6/2021 6:29:06 AM
From: 2hugo	Respond to of 2146

gary RE: How important is having extra cash?Everyone is different,what ever makes you comfortable,right now the market is selling off would you rather have cash to snap up bargains or not. That's the question that only you can answer and it has to be part of your money management do's and dont's. If you are saving and DCA then after you have a emergency fund, no you dont need a cash buffer ,there might come a time in the future when you will but only you can answer if and when you should stop DCA and accumulate cash.

To: LegitDGIguy who wrote (1430)	12/6/2021 12:08:42 PM
From: DaveVK	7 Recommendations Recommended By bikedude cemanuel Cub Fan ddbpaso eaglebear and 2 more members Read Replies (1) \| Respond to of 2146

I guarantee you that Cramer's 25% returns did not include the returns on his cash. That’s the conundrum. Everybody would like to be able to invest when sudden price drops present opportunities, but in the meantime the cash earns nothing. I don’t believe statements like Cramer's because the person never figures the 0% return they’re getting on the cash. They’ll say it’s “off to the side” or “doesn’t count” in their claim. I have 2 categories of money: Non-investable (retired cash, combination of emergency funds and operating cash) and investable (everything else). If it's investable but not invested ( ie, in cash) then it’s earning nothing and pulls down the overall returns of my investing activities. Unless the market crashes, in which case 0% on the cash pulls UP the overall returns. You’ll need to think about your goals, and how to figure returns, to answer your own question. For me, my investable money is almost 100% fully invested 100% of the time. Dave

To: LegitDGIguy who wrote (1430)	12/6/2021 1:59:22 PM
From: Dave the wildpitcher	3 Recommendations Recommended By cemanuel rnsmth tdanzig Read Replies (1) \| Respond to of 2146

Re: How important is keeping extra cash? Personally, I keep no cash in my investment accounts. I am fully invested in something at all times. Then again, I'm not trying to earn 25% annual return for 15 years. That's just not where I am in my investment life. I stay invested for a growing stream of income which supplements our other retirement income so we can live a good life. No money goes into my portfolio - it is coming out at this point. I do try to focus on getting a minimum 8% annual total return (double digit is better) on every stock purchase I make. That way my portfolio should continue to grow as I remove the dividends for living expenses Dave