Skip to content

860-645-1515 | 391 Center Street • Manchester, CT • 06040

Thomas F. Scanlon, CFP®, CPA
Client Access
  • Home
  • Services
    • Asset Allocation
    • Estate Planning
    • Financial Planning
    • Retirement Planning
  • ‘Second Opinion’
  • Financial Roadmap
  • Resources
  • About
  • Contact
  • Blog

Investment Objectives

Why Cash is Not Trash

January 3, 2024January 27, 2020

This article, last updated in December 2023, is original content written by Manchester, CT Financial Advisor Thomas Scanlon, CFP®, CPA.

Harvesting Interest Gain

The rates of return on cash (checking, savings, and money market) are very close to zero. This begs the question, “Why have any cash in the portfolio?” Some commentators have even suggested that “Cash is Trash.” I disagree.

Cash Reserve Fund

The first thing investors should do is fund their cash reserve fund. This fund can be accessed when an emergency arises. This emergency could be unexpected medical expenses or perhaps you lose your job. The popular media maintains that investors should have at least six months of living expenses. Our experience is that most investors have three months or less in their cash reserve fund. Although your cash reserve fund is an asset and part of your net-worth it’s not considered part of your investment portfolio as you are not investing it.

Depending on an investor’s timeline and objectives, a typical portfolio may have 5%-10% allocated to cash. This provides a buffer to the portfolio. Additionally this cash is liquid if funds were needed and provided dry powder if a buying opportunity presents itself. Before the Great Recession of 2008-2009 you might be able to get 3%-4% return on your cash. (1) It has taken some time but in December 2023 you might get 4%-5%.

Continue Reading: Why Cash is Not Trash

Categories Financial Planning Tags Asset Allocation, Buying Opportunities, Cash, Cash Reserve Fund, Checking Account, DJIA, Dow Jones Indusstrial Average, Fed, Federal Reserve, Great Recession 208-2009, Interest Rates, Investment Objectives, Investment Portfolio, Investment Timeline, Investors, Medical Expenses, Money Market Account, Net-worth, Portfolio, Reuters, Savings Account, Short-term Interest Rates, Stock Market, Stock Market Correction

Contact your financial services professional

    The Scanlon Report

    • The Back Nine – Practical Financial Steps for Retirement
    • 5 Easy Reasons for a Pending Economic Slowdown
    • “I Love Paying Taxes.” Said No One, Ever!

    Client Access

    Log in to your RJ Account

    Check the background of this investment professional on FINRA's BrokerCheck

    Securities offered through Raymond James Financial Services, Inc., Member FINRA / SIPC
    Investment advisory services offered through Raymond James Financial Services Advisors, Inc.

    These services are not available in all states. We may only transact business in your state if first registered, excluded or exempted from state broker dealer, investment adviser, BD agent or IA rep registration requirements. Please contact us for approval in your state. No follow up or individualized responses will be made by the firm, or its representative, in the state unless all registration requirements have been complied with by the firm and its representatives. This site is published for residents of the United States only. Raymond James' Financial Advisors may only conduct business with residents of the states for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

    Your privacy: Raymond James has policies that restrict access to nonpublic personal information about you to those employees, associates and others who have need for that information to help us run our business, manage your accounts, market or provide investment alternatives or services to you, or to employees, associates, and others who assist those who help us run our business, manage your accounts, or market or provide investment alternatives or services to you. Additionally, we maintain physical, electronic, contractual, and procedural safeguards to protect your nonpublic personal information. RJ Privacy Notice, RJ Legal Disclosures

    Links to other websites: Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

    “Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. Any opinions are those of Thomas F. Scanlon and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.

    391 Center Street • Manchester, CT 06040 • Phone 860-645-1515

    • Home
    • Website Accessibility
    • Contact Us
    © 2025 Thomas F. Scanlon, CFP®, CPA | All rights reserved.