Is it a better option to have a lot of reserves of cash saved aside for investment purposes? Taking into consideration both stock options are fairly on par?

Hi Nicholi,

It is always a good idea to have a warchest. (Note: This is very different from an emergency fund). Naturally there is an opportunity cost to have a war chest and not use it, but you can mitigate it somewhat by keeping your warchest in FDs, high yield saving accounts and money market funds.

The purpose of a warchest is to ensure that you have ammunition to take advantage of any ad-hoc investment opportunities that arise. You don't have to use it unless a really good opportunity presents itself, but if your warchest gets too large for your comfort, you can just deploy a portion of it (say, 20%)