April 14, 2023.
Cash and cash equivalents are back in vogue with investors after the big jump in interest rates and market volatility of the past year, with investments such as money market funds, high interest savings ETFs and guaranteed investment certificates seeing big inflows.
“Most everyone knows that 2022 was a very challenging market for all asset classes – save for cash – so many people’s appetite for risk has changed,” Diana Orlic, portfolio manager and wealth advisor at Richardson Wealth, tells Yahoo Finance Canada. Her firm is currently holding higher levels of cash for clients.
“Cash equivalents are now paying clients to wait. Although it could have a slight drag on performance in the longer term…there is still competition for yield now. Do you take risk in the market to earn dividends or take little or no risk and earn a safe 4.5-5%.”