Is Holding Cash Still a Strategy in 2025?

Cash is king

Stay invested and focus on high-quality blue chip stocks. If you're already invested, there's little reason to sell just to hold cash in the current market. Only consider selling if a stock has fundamentally lost its value proposition or become significantly overvalued.

I also have some funds—mainly from matured T-bills—ready to deploy when market opportunities arise during downturns

https://www.straitstimes.com/business/economy/s...

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"He recommended a strategy of pacing fresh investments into markets through a dollar-cost averaging strategy in the current volatile market environment. “Staying purely in cash is not a good strategy as markets could see significant gains if tariff fears ease significantly and the tide turns,” he said."

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the news article sharing is just a general thought.

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Individually, everyone trade or invest differently. The way your questions are phrased, seem more like Opportunistic Trader.

As long as you have identified entry/exit, just go for it

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The paradox of wealth building today isn't about choosing between being fully invested or all cash – it's about understanding when cash itself becomes a strategic position rather than merely an absence of decision.

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I've noticed several misconceptions dominating these discussions:

Myth #1: "Cash is always a drag on returns"
While true in a purely mathematical long-term model, this ignores the psychological reality of investing. A strategic cash position allows you to act decisively during volatility without the paralysis that comes from being fully deployed when opportunities emerge.

Myth #2: "Buffett's cash position means he's bearish"
Berkshire's cash position isn't a market timing call – it's a reflection of discipline. They're not finding opportunities that meet their criteria at current valuations. This distinction matters tremendously.

Myth #3: "There's no yield in cash anymore"
Singapore dollar T-bill yields and money market funds are still providing respectable returns while maintaining liquidity – essentially paying you to maintain optionality.

Here's how I'm advising clients to approach the cash question in 2025:

1. Define your "strategic cash" allocation separate from your emergency fund
   For most of my clients in their wealth acceleration phase, this means 15-25% of investable assets designated not as "cash" but as "opportunity capital."
2. Create trigger conditions for deployment
   Work backward from your investment thesis. One banking sector client has established specific valuation metrics for Singapore banks that would trigger a partial or full deployment of his opportunity capital.
3. Consider the Singapore-specific context
   With MAS maintaining its appreciative stance on SGD, holding cash in Singapore dollars provides both yield and potential currency appreciation compared to some regional alternatives.
4. Diversify your cash itself
   Not all cash positions need the same liquidity profile. Layer your cash across T-bills, money market funds, and higher-yield fixed income with 3-6 month maturities.
5. Reframe FOMO psychologically
   The fear of missing out on gains must be balanced against the opportunity cost of missing future better entry points. This mental reframing has helped many of my clients maintain discipline during market exuberance.

For professionals navigating Singapore's unique wealth landscape, cash isn't the absence of strategy – it's a position that provides both protection and opportunity. In my wealth advisory practice, I've found that clients who strategically incorporate cash positioning tend to make more rational decisions during market extremes.

The discipline to hold cash requires the same psychological strength as the discipline to stay invested during downturns – both require conviction and clarity about your long-term financial architecture.

If you'd like to continue this conversation or learn more about strategic cash positioning in the Singapore context, follow my more detailed analyses on Instagram (@ngooooied) where I regularly share insights on wealth building strategies specifically designed for Singapore professionals.