Sentences with phrase «cash as ballast»

Let's start with the question of cash as ballast.

Cash can serve as portfolio stabilizer just like bonds, and because cash is so stable, you can use less cash as ballast and achieve the same outcome as more bond ballast in a mixed portfolio.

Going a step further, you can approximate the effect of bond ballast using smaller amounts of cash as ballast instead.

With cash as ballast, the above graph shows the ride along the way is much less bumpy than using 100 % stocks and not too different than using larger amounts of bond ballast.

In Article 7.3, we found that the normal advantage of bonds over cash as ballast in a mixed portfolio with stocks is currently absent, because bonds are not expected to provide a real return above inflation anytime in the foreseeable future.

Not exact matches

But Constellation's $ 1 billion all cash deal for Ballast Point isn't panning out quite as well as company executives had hoped.

At the same time, bonds still perform a similar ballast function as cash.

As interest rates rise, intermediate duration bonds are expected to slowly return to their proper place in the mid-term bucket, but for right now, an equally good choice for «safe» ballast in the mid-term bucket is cash.

However, to select a percentage of bonds within this range we must also factor in the amount of ballast held as cash in the short - term bucket.

We saw in Article 7.3 that small amounts of cash can provide very stable portfolio ballast as compared to larger amounts of bonds.

But there are times, like right now, where cash is nearly as good as bonds, and can be used just as effectively as bonds for the short - term ballast portion of your portfolio.

But there are times, like right now, where cash is nearly as good as bonds, and can be used just as effectively as bonds for the short - term ballast portion of your portfolio (as discussed more in Articles 7.3 and 8.3).

The approach of using cash for ballast now and bonds for ballast when interest rates rise, does not completely address the advantages of cash as a reserve for short term expenditures and investment opportunities.

The end result using less cash ballast is nearly the same as using larger amounts of intermediate term bond ballast.

When intermediate bonds yields become measurably better than cash, say about 4 %, it is probably time to reconsider using bonds as ballast instead of cash.

As you would expect, over the long term the bond ballast (Portfolio 3) does better than the cash ballast (Portfolio 2).