Where do I put cash savings?

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chodthewacko
Posts: 1
Joined: Wed Jun 03, 2015 12:34 am

Where do I put cash savings?

Post by chodthewacko »

Hello,
I absolutely love this tool and have donated towards it.

One thing I am wondering though - where do I enter savings account money?
i.e. money that isn't growing at the "investing style" rate, but money that should still increase the "chance of success"?

And yes, I should in theory be investing all retirement money, but that's not such an easy sell to the SO.

- Frank

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Where do I put cash savings?

Post by jimr »

The best way to handle that is to include the cash in your overall portfolio, but then reduce the portfolio return/std deviation appropriately to account for the impact of the cash diluting the portfolio's risk.

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