Pros
This is the most liquid form of financial asset.
Cons
You do not earn any return from holding idle cash. The purchasing value of money diminishes over time because of the effect of inflation.
Investors are encouraged to keep at least six months' worth of expense money to tide them over rainy days.
Best for
Generally, there is no need to keep too much cash because there are other assets like deposits, bonds, stocks and unit trusts that can be liquidated within a short time, with little or no penalty, depending on the prevailing market conditions.
Cons
You do not earn any return from holding idle cash. The purchasing value of money diminishes over time because of the effect of inflation.
Investors are encouraged to keep at least six months' worth of expense money to tide them over rainy days.
Best for
Generally, there is no need to keep too much cash because there are other assets like deposits, bonds, stocks and unit trusts that can be liquidated within a short time, with little or no penalty, depending on the prevailing market conditions.
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