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Cash Management Strategy for Investors



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Cash Management Strategy is an important part of trading and investment planning.

The cash levels can go up and down as we go in and out of investments.

As investors, we should never be 100% invested in the markets at all times.

In general, always keep at least 10 to 25% of your cash that you have allocated for investing aside so that it is ready for use when you really need it.

Such cash for example helps in case of an emergency .. such as when market falls and give in an opportunity to accumulate a good company at lower price.

Keep various levels of cash ready for available for such needs. The cash can be in the form of:

1. Cash Balance in the Ledger account of your stock broker

2. Liquid Exchange Traded Funds

3. In Liquid Mutual Funds or Arbitrage Mutual Fund Schemes

3. As balance in your Savings or Current Account of your bank

4. As a fixed deposit etc.

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