RETHINK THE COST OF CASH

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.

¹ BlackRock; Morningstar; Tax Foundation. Past performance is no guarantee of future results. Assumes reinvestment of income and no transaction costs. This is for illustrative purposes only and not indicative of any investment. Federal income tax is calculated using the historical marginal and capital gains tax rates for a single taxpayer earning $110,000 in 2011 dollars every year. This annual income is adjusted using the Consumer Price Index in order to obtain the corresponding income level for each year. Income is taxed at the appropriate federal income tax rate as it occurs. Capital gains for stocks are assessed every five years when there is a cumulative gain from the last high and assume a five-year holding period to determine the long-term capital gains rate. Bonds are assumed to be held to maturity. No state income taxes are included. Stocks are represented by the S&P 500 Index. Bonds are represented by the Morningstar/Ibbotson Intermediate-Term Government Bond Index. Cash is represented by the Morningstar/Ibbotson 30-Day US Treasury Bill Index. Inflation is represented by the Consumer Price Index. It is not possible to invest directly in an index.

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