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.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.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.EDITAlthough 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.