A friend of ours used to say, “Cash is king.” Her principle was that it is rock solid and always available. Now with the decline in the stock market and the failure of many banks, number of people are starting to think cash.
So should you liquidate your assets and move to cash?
Not at all. Actually, unless you own gold, it is not a time to sell anything, neither your home nor your stocks. You will incur huge losses, and since the interest rates are expected to be low and inflation might go up, the return on cash that you will get in a CD or savings account will not be enough even to cover the rate of inflation.
While no one knows the future, it is best to stay tight right now (as you will see from the numbers on the right, we are sitting on a lot of cash but that was way before the market crashed). History tells us that ups and downs in the market are part of the way things work. Eventually market will go up and indisputably the stock market is still the best place to grow your money.