Financial Advisors Head to Cash as Stocks Move Up

Excerpt from Investment News, published February 14, 2019


Eric Walters, president of SilverCrest Wealth Planning, isn't anywhere near 40% cash, but he is bumping cash allocations up to the 5% to 10% range, which is well above his usual policy of staying fully invested.

"We're seeing the 12-month rate of change for economic indicators starting to roll over, and it's time to be more careful," he said.

In terms of the drag on overall portfolio performance, Mr. Walters said cash has hurt returns this year, "but not like it would have a few years ago when we were getting zero from cash."

One thing making it easier to justify the move to cash is the recent tightening by the Federal Reserve, which has pushed money market yields up to around 2.3%.

"We put some cash to work in October and again in December," Mr. Walters said, "There's a chance we'll have a shallow recession by the end of this year or into 2020, so we're preparing for that."

SilverCrest Wealth Planning