# Move to Cash? {Keep Politics out of this one} **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 1, 2025, 1:00pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713 "2025-02-01T13:00:42Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [February 1, 2025, 7:13pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/21 "2025-02-01T19:13:28Z")
> [@DaveUnknown](#): > > If anything an asset bubble may form which helps the rich There has been an asset bubble for a decade, and it’s given no signs of popping. Doesn’t mean it won’t, but the market seems just fine with crazy-high price/earnings ratios. Long- and short-term investment horizons should take a moment to reflect on their actual risk tolerances and adjust accordingly. ---
**Author:** ![OldOlds](https://avatars.discourse-cdn.com/v4/letter/o/a3d4f5/32.png) [@OldOlds](https://boards.straightdope.com/u/OldOlds)\ **Post date:** [February 1, 2025, 7:19pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/22 "2025-02-01T19:19:49Z")
> [@We\_re\_wolves\_not\_werewolves](#): > > sure, but would you have known when to get back in? Timing the market requires you both to know when to get out AND when to get back in. Very difficult to do I acknowledged this in to OP. I’ve been in the markets in one way or another since 1996 and always focused on low cost index funds, primarily the S&P 500. I’m quite content with my returns over that time. But the difference with some of the examples, like the subprime, was that I for one had no idea it was coming. I’d argue a rational person should have seen the dot com collapse (and some did), but at that point I was 4 years out of school, had decades left, and my assets were probably around $15k. It wasn’t really relevant to me. What’s different here is that we KNOW that someone is PROMISING to do something that by all expert accounts is a Bad Idea. I think that is different (which is why I asked what you would have done if you knew one of those previous busts was coming; the question is to what extent can we conclude with certainty that we are going to pay for these policies). Just looking for opinions, and I really haven’t decided what to do. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [February 1, 2025, 8:04pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/23 "2025-02-01T20:04:46Z")
> [@We\_re\_wolves\_not\_werewolves](#): > > sure, but would you have known when to get back in? If I’m reading the OP correctly, they are assuming 12:01pm EST January 20, 2029. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 1, 2025, 8:19pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/24 "2025-02-01T20:19:28Z")
What is your time horizon and volatility tolerance? Again if you are going to need cash fairly soon then having cash equivalents (eg laddered CDs and quality bonds you plan to hold to maturity dates) to at least mostly cover those needs is reasonable. I think minimally it is a reasonable to have some portion of the rest in asset classes that at least historically are not strongly correlated. That means having a variety of indexed stock funds including some international, bonds, and a gold fund, not because the latter is a safe harbor but it does often travel in different timings to stocks and bonds. How much in each, how aggressive or defensive to be? I have zero confidence in anyone’s prediction of the market over the next few years so it is more a question of how anxious you are of a crash (and your ability to ride it out) vs how upset you will be that you missed out on gains. Maybe right after you put back in it crashes? No way to know. ---
**Author:** ![commasense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/commasense/32/3017_2.png) [@commasense](https://boards.straightdope.com/u/commasense)\ **Post date:** [February 1, 2025, 8:46pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/25 "2025-02-01T20:46:00Z")
> **Hidden by Moderator, political swipe.** > > You mean at Emperor Trump’s third inauguration? ---
**Author:** ![DaveUnknown](https://avatars.discourse-cdn.com/v4/letter/d/94ad74/32.png) [@DaveUnknown](https://boards.straightdope.com/u/DaveUnknown)\ **Post date:** [February 1, 2025, 8:53pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/26 "2025-02-01T20:53:51Z")
Importantly, continue to save/put aside as much as possible. Ideally an employer matches a percentage of one’s salary. Also, companies usually offer some sort of managed 401k plan based on your retirement timeframe, e.g. 10 yrs, 20 yrs. etc., and are pretty well diversified with low fees. These can help manage risk. I do use one, in part. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [February 1, 2025, 9:34pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/27 "2025-02-01T21:34:02Z")
Closed on February 1, 2025, 9:34pm UTC ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [February 1, 2025, 9:36pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/28 "2025-02-01T21:36:25Z")
**Moderating** : ## Keep the politics & Trump comments out of this as per the OP and my modnote a few posts later. ---
**Author:** ![What\_Exit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/what_exit/32/10652_2.png) [@What\_Exit](https://boards.straightdope.com/u/What_Exit)\ **Post date:** [February 1, 2025, 9:37pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/29 "2025-02-01T21:37:08Z")
Opened on February 1, 2025, 9:37pm UTC ---
**Author:** ![We\_re\_wolves\_not\_werewolves](https://avatars.discourse-cdn.com/v4/letter/w/838e76/32.png) [@We\_re\_wolves\_not\_werewolves](https://boards.straightdope.com/u/We_re_wolves_not_werewolves)\ **Post date:** [February 2, 2025, 4:03pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/30 "2025-02-02T16:03:14Z")
> [@OldOlds](#): > > Just looking for opinions, and I really haven’t decided what to do. one other thing you may consider is shifting your investment to foreign stocks instead of US stocks. They would presumably not be affected or affected much less by US import tariffs. ---
**Author:** ![xtenkfarpl](https://avatars.discourse-cdn.com/v4/letter/x/c2a13f/32.png) [@xtenkfarpl](https://boards.straightdope.com/u/xtenkfarpl)\ **Post date:** [February 2, 2025, 6:59pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/31 "2025-02-02T18:59:16Z")
As my wife & I get older, I’m trying to move assets into more conservative instruments. Sooner or later there will surely be another Black Swan event like the 2008 crash. But we don’t know what will trigger that… if we did, we’d be able to profit. 🙂 The problem of course is capital gains tax: a lot of our long term investments have appreciated substantially over their cost basis. So selling them will trigger a lot of tax. It’s a question of how much are you willing to fork over to the taxman for peace of mind? May not be such an issue if your assets are mostly in an IRA, but the bulk of ours aren’t. ---
**Author:** ![anny\_m](https://avatars.discourse-cdn.com/v4/letter/a/96bed5/32.png) [@anny\_m](https://boards.straightdope.com/u/anny_m)\ **Post date:** [February 3, 2025, 6:16pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/32 "2025-02-03T18:16:03Z")
> [@DSeid](#): > > Again if you are going to need cash fairly soon then having cash equivalents (eg laddered CDs and quality bonds you plan to hold to maturity dates) to at least mostly cover those needs is reasonable. I just want to point out that CD rates have gotten a little squirrelly lately. I thought the point of laddered CDs was that each time a CD came due, you’d use the money to buy a 5-year CD, so that you’d have say 20% of your money avaiable each year, and each reinvestment would be at the highest rate available at that time. Five-year CD rates were always higher than 4-year rates, which were higher than 3-year rates etc. at that point in time. (Obviously, this year’s 5-year rate could be lower than last year’s 3-year rate, but it would be higher than this year’s 3-year rate.) I’m not sure the “Longer term = higher interest” relation is true any more. For example, at Discover Bank, a 1-year CD is paying 4.0% while a 3-year CD is paying 3.4%. ---
**Author:** ![OldOlds](https://avatars.discourse-cdn.com/v4/letter/o/a3d4f5/32.png) [@OldOlds](https://boards.straightdope.com/u/OldOlds)\ **Post date:** [February 3, 2025, 6:26pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/33 "2025-02-03T18:26:49Z")
And a good money market (ie SPAXX) is paying 4% with no duration requirements. Now, granted, that rate could come down, but I suspect we’re going to be in for these rates for a while. ---
**Author:** ![SunUp](https://avatars.discourse-cdn.com/v4/letter/s/ea5d25/32.png) [@SunUp](https://boards.straightdope.com/u/SunUp)\ **Post date:** [February 3, 2025, 6:28pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/34 "2025-02-03T18:28:12Z")
> [@anny\_m](#): > > I’m not sure the “Longer term = higher interest” relation is true any more. For example, at Discover Bank, a 1-year CD is paying 4.0% while a 3-year CD is paying 3.4%. The bond market is pricing longer-term interest rates according to its assumption of what the Fed will do. At the moment, the prevailing market opinion is that the Fed will continue to unwind interest rate hikes over the next few years. So that 4% one year CD may look more attractive than the 3.4% three year, but once the one year CD matures then longer-term interest rates going forward may well look more like 2.5-3%, meaning you might have better return over the next three years if you jump on that three-year CD now. Or, of course, interest rates could spike to 6% in a couple years if the Fed needs to put a damper on inflation, in which case having taken the longer-term CD would look rather foolish. Ain’t market timing fun? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 3, 2025, 7:30pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/35 "2025-02-03T19:30:09Z")
Duly noted and the point holds: having cash and cash equivalents, and of course income, to weather a storm is prudent. The exact formulation of that based on the facts of the moment. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [February 3, 2025, 9:57pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/36 "2025-02-03T21:57:30Z")
> [@We\_re\_wolves\_not\_werewolves](#): > > I’m not trying to be rude, but do you think you know more than the investment bankers, fund managers, and financial analysts? Don’t you think they may have had the same thoughts and baked them into their financial decisions? You are working with public information here that everyone else has access to as well. Assuming an efficient market, all these considerations are already baked into the price of stocks. So, stocks could go up, go down, or stay the same. But to think that you can predict it better than anyone else is not rational. 1. The price of stocks are set more by retail investors than specialists. When retail investors aren’t paying attention to the stock market, a rational financial situation is baked in. When they _are_ paying attention to it, you get results like Tesla, GameStop, and the 2020/2021 bubble. 2. The ability to stay rational is how the big successful investors are able to consistently pull ahead. They scoop up the excess money that’s pushed into the system by retail investors, sit on it, and then put it back in when things are underpriced. Warren Buffet just set aside 50% of his holdings into cash. ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [February 3, 2025, 11:42pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/37 "2025-02-03T23:42:07Z")
As regards the OP’s comment that we’ve never had anything like (He Whose Name Shall Not Be Spoken) before, we did for four years starting in 2017, and that provides some kind of guide as to what to expect. I mentioned in at least one other thread having missed out on some stock growth by heavily pulling back into money markets. We’re cautiously doing some but considerably less of the same thing now, not just in anticipation of societal/business upheaval but because at our age it makes sense. Throwing everything into cash and stuffing some of it in mattresses doesn’t seem like a reasonable move. I’ve got a couple of grand tied up in potted fig trees, and if worse comes to worst, I can break them up into cuttings and sell them on the fig collectors’ market. There’s potentially a small fortune there. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [February 3, 2025, 11:42pm UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/38 "2025-02-03T23:42:19Z")
How safe is so-called “cash” when all Federal regs, including those regulating Wall Street, are about to be non-enforced and possibly rescinded? Depending on just how wacky you want to assume stuff becomes, Swiss franc banknotes might be the only useful “cash” on Earth. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 4, 2025, 12:04am UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/39 "2025-02-04T00:04:22Z")
> [@Sage\_Rat](#): > > The ability to stay rational is how the big successful investors are able to consistently pull ahead. They scoop up the excess money that’s pushed into the system by retail investors, sit on it, and then put it back in when things are underpriced. Warren Buffet just set aside 50% of his holdings into cash. Warren Buffet famously mocks the vast majority of the big investors: most do not beat the S&P index. Now I don’t know Warren Buffet but pretty sure, you’re no Warren Buffet. Few are. Very very few stay “consistently ahead.” In any case, no Buffet did _not_ “just” move 50% into cash. Oh he is very very cash heavy right now, but that [has been a steady movement to cash since the end of ‘22](https://www.firstlinks.com.au/warren-buffett-changes-mind-age-93). (Since that article more, up to $325 billion in cash.) His value investment discipline has historically done well. But those of us who are not Buffet quality stock pickers would have missed two very very good S&P index years following his lead this time. Importantly there is no “just” here; it is not a reaction to Trump and his stupid stated policies. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [February 4, 2025, 1:01am UTC](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713/40 "2025-02-04T01:01:11Z")
> [@DSeid](#): > > I don’t know Warren Buffet but pretty sure, you’re no Warren Buffet. As aren’t you, nor me. But if DSeid says that you shouldn’t make moves that _feel_ rational, because you aren’t Warren Buffet and only Warren Buffet knows how to invest rationally, then that also says that DSeid isn’t rational and can’t evaluate whether you’re closer to Warren Buffet or further from Warren Buffet in your feelings. Most people aren’t Warren Buffet. The OP probably isn’t. But if you know not to play casino games, understand compound interest, can do some math, understand that a loan is shifting the things that you could save up to buy in 30 years to purchasing now, and don’t feel any compulsion to do what others do nor do the opposite of what they do, then you’re probably going to do reasonably well over time. [Previous page](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713.md?page=1) [Next page](https://boards.straightdope.com/t/move-to-cash-keep-politics-out-of-this-one/1013713.md?page=3)