ARE YOU ALL CASH?

An acquaintance was discussing with me on the recent 'plunge' of China markets and its ramifications.

I cooed that I was 'all cash' at the moment and he threw me a look and said, "I am not so sure if it is good to be all cash now'. 

I went away not thinking about it for another 6 hours. At the end of the night, I concluded it was a good time to be all cash.

Why? Here's 4 possible reasons:

1.  The absolute edge in life is buying power. 

2.  Markets are presenting good opportunities to enter several sectors, including equities and bonds, but not Singapore properties.

3.  This is further exacerbated by political woes and turmoils in Europe, Middle East, East Asia and South America.

4.  And unless you are buying properties or cars in SG now, deflation seems to be trumping inflation.

So why are people not in an all cash position? Here's 4 possible explanations:

1.  They have already vested their money with no cash to deploy.

2.  They have debts from home/car loans to service.

3.  They have a fear of missing out. They perceive the need to get more out of their cash instead of leaving it in the bank and gnawed away by inflation.

4.  They do not have that much cash to begin with.

The good thing about being a young retail investor is you have time on your side. Work hard, save up the money, deploy them in tranches at significant corrections and wait it out. Do be patient. 

Cheerios.

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