Faculty Publications

Title

Is Cash Still King? Does a Coming Equities Correction Mean You Should Hold More of It?

Document Type

Article

Publication Date

6-6-2016

Abstract

There is an old investment adage that cash is king. At the recent Berkshire Hathaway annual meeting, a money manager said that he had his clients "30% in cash" and was contemplating moving that percentage to as much as 50% in anticipation of what he sees as the inevitable correction in equity values.

Now, there is little doubt that in the coming years that there will be a significant correction, defined as a 20% or more drop in equity prices.