Reply to How much of net worth should be invested vs. kept liquid?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]My rule of thumb that I tell my clients is to have 3 months worth of expenses saved, in cash, in a rainy day fund (aka savings account).  All other should be put to work for you because it's not like your investments aren't illiquid.  This is obviously based upon current market conditions being a bull market.  Cash or cash-equivalents are paying you tenths of % points in this monetary environment so inflation is causing you to lose value on your savings.

Put it to work for you.[/quote

Agree but my extra is sitting in cash right now waiting for a correction so I can put in equities.  I know you shouldn't try & time the market but I'd like to avoid buying high.

What do u think?[/quote]

I think that despite what you say, you're essentially market timing by waiting, and market timers are almost always losers (relatively).

How much cash are you sitting on?  If it's not upper six figures or seven figures I'd skip individual equities and put it in well established mutual funds (not nec. index funds but that's one approach).  You might try splitting it into 6 months worth of monthly investments and get some dollar cost averaging benefit out of that, and invest 1/6 each month over 6 months.

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