Originally Posted by Master-Classter
question for you guys... what do you do with spare cash? I've recently been trimming/selling off a lot as mentioned and now have a fair amount of cash sitting around. Technically it's all been 'assigned' with various buy orders but i'd rather cancel these orders and just set up alerts and put the money to work doing something in the meantime. Should I buy some REITS, or Bond funds etc? I don't want anything risky per se, but at least something better than just cash sitting around doing nothing. What do you guys do?
Whether a particular investment is "better" than cash depends on how it does, of course.
That aside, if you really view this as cash you're trying to keep available for when entry points on stocks you're watching appear, my suggestion would be to keep in cash. If you start putting it into REITs or bonds because you're chasing yield, you're not only taking on the inherent investment risk, but also risking missing opportunities you're really interested because your "alternative cash" vehicle turns out to be less liquid than you thought (administrative hold ups, price dip just when you want the cash, whatever). If you've looked at an REIT or a bond fund and decided that it's a worthwhile investment or trading opportunity as part of your overall strategy, then great. But these things offer a yield for a reason -- it's compensation for the risk investors are taking on. They're not "just like" or "almost like" cash, and in my opinion it's a mistake to treat them as though they are.
As always, just my two cents cash money.