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Cash Management

Developing a Cash Management Strategy

Cash management is a fundamental part of many investment strategies. In layman's terms, it means putting cash to work.

The overall purpose of keeping cash in a portfolio is typically to maintain access while securing a conservative yield rate that beats a standard savings account at a bank. What that means specifically depends on the person's goals.

Understanding Cash Management Strategies

Cash management strategies are varied. People choose between them based on various factors:

  • Expected need for immediate liquidity
  • Overall risk tolerance
  • Portfolio performance expectations

Over the longer term, periods of growth often suggest different cash strategies than periods of stability. However, it all depends on a person's financial goals.

Using Cash Management Tools

People hold cash via various types of accounts or instruments. The following are typical examples:

  • Fully liquid money-market accounts
  • Treasury bills (Federal short-term securities)
  • Short-term certificates of deposit

CDs are available through most banks. There are also secondary markets in which brokers trade CDs and T-bills on behalf of investors.

Beronio Wealth Planning Can Help With Your Cash Management Plan

Appropriate cash management could balance risk, improve yield and maintain liquidity. That said, cash is only one part of a healthy, high-performing portfolio. When you're ready to move strategically toward your personal wealth goals, please contact us at Beronio Wealth Planning.

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