Harry Browne’s Rules of Financial Safety (1999)
Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life.<p>For this sort of dead-basic investment advice, there is no point being ready for situations where a cash position is advantageous. People are much more likely to panic, do something stupid or get ground down by inflation.<p>It is better to hold enough cash for an emergency fund then a mix of productive and hard assets. Gold is good as a hard asset, but anything that is durable would be ok. The advantages of cash are small compared to the risks and locked-in losses.<p><i>EDIT</i><p>Although thanks to other commentators I see that the fine print says that cash isn't literal cash and is actually "short-term U.S. Treasury securities"; making the whole complaint a bit moot. Once the money is in bonds it becomes a matter of strategic thinking rather than a simple "don't do that". I wouldn't do that right now, but given the level the article is pitched at I think it is fair advice as long as people read that cash doesn't mean cash cash.