Why cash is still king

Many investors regard cash only as a means of exchange. But holding some cash in your portfolio could be a very smart move. Here's why.

With Isa savings rates so low, it's tempting to ask whether it's worth holding savings as cash at all. Beyond its insurance value against a rainy day, many investors might say no, it's just a means of exchange. But they're wrong, says Socit Gnrale's Dylan Grice. "As an asset class, cash doesn't get the attention it deserves."

Perhaps this is no surprise. Textbook investing is all about accepting risk to achieve a decent return who wants to invest in a dead asset that offers a zero expected real return (taking inflation into account)? But right now, there are three good reasons to hold at least some cash.

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