Cash-820x450

Cash and cash equivalents (e.g. bank deposits, money market products) are an important part of almost any investment portfolio. Cash and cash-equivalents are practically riskless assets held for liquidity reasons. Many investors hold a large part of their capital in liquid securities to take advantage of investment opportunities that arise during turbulent times. Deviations from the strategic liquidity levels occur when available investment opportunities do not offer attractive rewards for the risk taken.