How to hold cash for a few years

So am I and gave two very recent examples after he posted:

 

Yes I realised that this morning but it's too late to alter my response. A short-term correction is one thing where the threat resolves itself within a few months. It's the 1930s/GFC issues and podcasts about bank bail-ins that have me questioning holding cash or ETFs that I had decided we would use a few years back when the economy was thriving.

 

S&P 500 Price Return, Dividend Return, and Total Return

What GFC?

 

I have heard anecdotally that the best place (possibly not the safest) to hold cash, is under the mattress. I don't know how you'd go if you only had a futon.

 

After seeing what could have happened with covid re property rental returns and the likelihood of future downs turns, a mix of income, Cash buffers and rental income seems to be the only way to truly mitigate risk of a down turn across all or any sectors. This is a long term view though and there is a moderate risk with any of these asset classes if you need the capital in 3 years time and can't wait for it to recover. As others have suggested low return options might be safer (with some professional guidance around risk).

 

But that is where people are more likely to panic.

During the COVID crash, my portfolio dropped 33% in a month.

Black Monday (19th October 1987) the Dow Jones dropped 22.6% in a day

 

COVID was a temporary blip and less a crash - Not quite sure we have seen the last COVID correction. March 2020-July 2020 was an unseen rebound. I pity those who sold out and fled to cash.

Prior to the GFC, the ASX 200 hit a high in November 2007 of 6851.5 before tumbling 54.5% to a low of 3120.8 in March 2009. CBA was $27.00...Dont you wish you could buy those !! It then took the index until July 2019 to surpass this pre-GFC high.

 

It's a shocker all right,especially for those that bought into the first and second sell-off ..
From memory as I never bought into the first only the second was $10_45 with second instalment total..
Dividends reinvesting from day one and buy in the dips as there has been a few bumps in the road and one serious above 70% decline but about from that its been apart from property one of the best investments we have made..

 

The HG means high growth = high risk for short term investments especially when coinciding with the spectre of interest rate rises so discounted shareprices, beware of recency bias . The D means diversification could be viewed as worsification, doesnt, mean low risk means high exposure to negative market sentiment . V means Vanguard = lots of noise and very ordinary returns, If you are going to invest in the big 4 and MQG . You would be better to invest in YMAX about 65% the banks, but you have some solid blue chips for worthwhile practicle diversifcation for the rest, I expect they also use options to reduce volatility and risk. I would not just put it in CBA has I think it is perhaps the most overpriced bank. WBC seems cheap now maybe for a reason though but I recently bought some. I would be looking at YMAX has been giving a 9% return. maybe some SOL and NetWealth since they have had a pull back.