Recently in the Globe and Mail under the heading A Stash of Cash for Bargaining Hunting an article was printed which can help all investors. Everyone in the investing world discusses how to buy, what to buy, but less often what to do or how much cash you should keep. We all know markets go up and down, when the markets go down it is a great opportunity to buy, hold and then sell and repeat. The issue with cash is the returns are less than being invested, however it is important in your portfolio to have cash ready to be able to buy when markets and the stocks you follow are seemingly bargain prices.

One of the money managers interviewed said as a value investor he generally selects stocks of good companies to buy and hold for the long term, but that does not mean holding on to it forever. If the price gets too high and the market is willing to pay a premium beyond what I believe it is worth, I will sell. Once sold, I look for other ideas or I will wait and it can be a number of weeks, cash can build up.

Think about the statement  – need a plan going in; need to know when the price is too high; and need to have patience. All that takes discipline, homework  and experience to do it on a regular basis.

Linking to dividend paying companies, stick to the fundamentals – buying and holding good companies that pay dividends in that manner the cash builds up and when markets offer bargains use the money to buy into the equity markets at great prices.

There are more questions than answers, till the next time – to raising questions.