I talk a lot about cash. Broken record, I know.
But here’s the thing… most people spend all their energy thinking about what’s happening in their portfolio. Which stocks to own. What the Fed is doing. Whether to buy the dip.
Meanwhile, their cash is sitting in a checking account earning next to nothing. Or worse, it’s scattered across three different banks with no real plan behind it.
Cash isn’t just “money you haven’t invested yet.” It’s a strategic asset. And how you manage it is important.
Most people think about cash as idle money. We think about it as a decision-making tool.
When it’s structured correctly, cash gives you the ability to act deliberately instead of react emotionally — whether markets are volatile, an opportunity shows up, or life circumstances take a turn.
Why Cash Deserves a Strategy
At Monument, we talk about keeping 12 to 18 months of living expenses in cash when markets are strong. That’s not because we’re being conservative. It’s because cash is the best and cheapest hedge against market downturns. This is important for clients whose lifestyle depends on their portfolio or who want flexibility during uncertain markets.
Cash doesn’t just protect you from market volatility. It gives you flexibility when things change. Things like: A career change, a liquidity event, a major tax bill, or taking on a new venture.
When cash is positioned well, you don’t have to make those decisions under pressure. You can take the time to be deliberate — and that usually leads to better outcomes.
When the market drops 20%, you don’t want to be forced to sell. You want to sit tight, let time work in your favor, and wait for the recovery. Cash gives you that option. It creates space between what the market is doing and the decisions you have to make.
But here’s where people get tripped up. They either hold too much cash in accounts earning almost nothing… or they lock it all up chasing yield and can’t access it when they need it.
The goal is balance.
Think About Your Cash in Three Buckets
1 – Near-term cash
This is the money you need for daily life, bills, and unexpected expenses. It should be liquid and accessible. A high-yield savings account or money market works here. Don’t overthink it.
2 – Planned expenses coming in the next 6 to 12 months
Maybe it’s taxes, tuition, a renovation. This money can go somewhere with a little more yield… a short-term CD, Treasury bills, something like that. You’re not touching it next week, so it can work a little harder.
3 – Longer-term cash reserve
This is the cushion. The hedge. The thing that lets you sleep at night when the market gets ugly. You can be more flexible here and optimize for yield, as long as you’re not locking it up so tight that you can’t get to it if life throws you a curveball.
A Few Things to Keep in Mind
Yield matters, but so does access. A CD paying an extra half-percent isn’t worth much if you have to pay a penalty to get your money out early.
FDIC insurance covers $250,000 per depositor, per bank, per ownership category. If you’ve got more than that sitting in one place, it’s worth spreading it around.
Money market funds are not the same as money market accounts. Funds are investments. They’re designed to be stable, but they’re not guaranteed. Accounts at banks are deposits. Different rules apply.
Treasury bills are backed by the U.S. government. They’re about as safe as it gets. But you’re trading some flexibility for that safety.
The Bottom Line
Cash isn’t exciting. Nobody brags about their savings account at a cocktail party.
But having the right amount of cash, in the right places, earning a reasonable return… that’s what gives you options. Most people don’t have a real cash strategy because no one has helped them connect cash to the rest of their financial life.
Your investment strategy, tax planning, risk management, and cash positioning shouldn’t operate separately. They should support each other.
When they do, cash stops being a drag on returns and starts becoming a tool — one that helps you stay invested when you should, move when you need to, and make clear-headed decisions along the way.
It’s all about having options. Because that’s what wealth is supposed to create.
Keep looking forward.
Dave
