Investing Ideas

Could too much cash be bad for your clients' wealth?

The answer depends on whether the goal is liquidity or possible protection.

By: Nils Bierkamp Jonathan Cain Brian Donnelly David Hays
Updated: 11/22/2023
Key Takeaways
  • Cash has provided liquidity, but since 1950, it hasn’t offered the same protection vs. equity drawdowns1 as bonds.
  • Since 1980, bonds have outperformed a proxy for cash2 in the 12 months after the last Fed interest rate hike.
  • One theoretical guidepost for forward bond returns suggests the potential for a healthy return in the coming years.
  • An increased yield cushion has added protection against an absolute decline for the bond market in the past.
Get the full white paper
Could too much cash be bad for your clients' wealth?
Download PDF
Explore more on:
Asset allocation Diversification Fixed income Inflation Interest rates Portfolio construction
Next steps to consider

Investment & Retirement Products

Meet the unique financial needs of your clients with our diverse investment and retirement offerings.

Learn more

Model Portfolios

Advanced Modeling & Rebalancing

Take your portfolio strategies to the next level with our flexible, innovative portfolio construction and management tool.

Learn more

Fidelity Portfolio Quick Check®

Analyze, compare, and optimize your investment strategy in minutes with our free on-demand digital portfolio analysis tool.

Learn more


1. Drawdown refers to a reduction in equity prices. 


2. A cash proxy is an asset class with return and liquidity characteristics that are similar to cash.

1136431.1.0
73F729BD58754AA99CF4AABC336D4B4F