Cash is an essential part of every portfolio. But holding cash and putting your portfolio “on hold” may not be a long-term investment strategy, since cash holdings historically tend to actually produce negative returns over time after considering the effects of inflation and taxes.
Cash averages a negative return after taxes and inflation
"So what do I do with my money"
Cash is an essential part of everyone’s finances and plays an important role in saving and investing. In terms of investment risk, cash is also probably the most conservative option. But safety and comfort come at a price—the probability you will not meet your long-term investment goals. While today’s market conditions understandably produce anxiety, investors with large amounts of cash should take a step back, assess their goals, and work with their financial professionals to make their money work harder for them.
Ask your financial advisor about how to build a balanced, diverse portfolio designed for growth even as markets stagnate.
Some investing ideas to consider
iShares 1-5 Year Laddered Government Bond Index Fund (CLF)
Seeks to provide a return based on the price and performance, before fees and expenses, of the DEX 1-5 Yr Government Bond Index (“the Index”). The ETF invests in a well diversified government bond portfolio that is laddered into 5 term buckets.
iShares 1-5 Year Laddered Corporate Bond Index Fund (CBO)
Seeks to provide a return based on the price and performance, before fees and expenses, of the DEX 1-5 yr Corporate Bond Index (“the Index”). The ETF invests in a well diversified corporate bond portfolio that is laddered into 5 term buckets.
iShares DEX Floating Rate Note Index Fund (XFR)
Invests in a regularly rebalanced portfolio of floating-rate bonds, selected by BlackRock Asset Management Canada Limited from time to time, that closely matches the characteristics of the DEX Floating Rate Index. Variable rate investments may provide higher yield than cash, but lower risk than fixed income investments during times of market volatility.
iShares DEX Short Term Bond Index Fund (XSB)
For investors building a well-diversified portfolio, iShares offers a broad range of transparent and cost-efficient indexing investments across asset classes, geographies and different styles.