Investors receive virtually no direct reward for holding cash in the current market environment. Thanks to the Fed’s zero interest rate policy that has been in place since December 2008, the interest earned for holding cash has fallen to effectively nothing even on the largest of balances. And with the stock market soaring to record highs in recent years during a time when annualized inflation has been running anywhere between +1% to +4%, the opportunity cost associated with holding cash has been dear to say the least. But despite all of these challenges, the case for holding cash may be growing stronger with each and every point that is added to the S&P 500 Index.
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