Is cash really king? With equity markets and valuations near long-time highs, investors may need to consider whether to stick with the asset class or instead hold more cash to capitalize on any future corrections, experts tell CNBC.
One expert advocating for cash is Charles Newsome, divisional director at Investec Wealth. He is recommending clients to increase their cash holdings in their portfolios just a little bit, he told CNBC last week.
"It is increasingly difficult to find value across the market in equities currently and having a bit of cash as an option against a market correction must be a good idea, so moving towards 5 to 10 percent cash," he said.
He added that more aggressive investors may want to hold a 20 percent share of cash in their portfolio.
The difficulty in finding value is because many stock markets are at or near record levels, or are trading at expensive price to earnings ratios (the company`s stock price compared to its earnings per share), which can indicate if a stock is overpriced.
0 comments:
Post a Comment