When interest rates are low, people are willing to
hold higher cash balances.
Not exact matches
The clear investment implication is to begin reducing risk in your stock portfolio — either by building up
cash or shifting your
holdings toward more conservative stocks, such as those with strong
balance sheets and which pay
high dividends.
As companies continue to
hold more
cash on their
balance sheets and find fewer suitable growth projects, dividends could increasingly offer
higher contributions to total return.
For households building an emergency
cash reserve, or for families wanting to
hold bank account
balances high, rolling your costs can be sensible.
But we
held very
high cash balances in those formative years, punishing during a raging bull market.