I am, in large, a stock picker. I am happy with the risk of investing in single companies. My thinking is that managing my own portfolio, my rewards should be greater than investing in a Fund or ETF. Mainly because Funds or ETFs add additional cost and tend to spread risk across a wider portfolio of stocks, so have lower growth / returns. Funds / ETFs also bring additional cost (albeit with the latter, the costs tend to be small)

I am particularly bad at keeping cash on the side-lines and tend to be 100% invested. This means its hard to action sterling opportunities that present themselves. I like to commit to a stock once its in the portfolio and I don't think its healthy to try and rebalance the portfolio; to jump onboard a new opportunity, or even buy in to a dip if it presents itself.

So, I have decided to change my approach and keep somewhere in the region of 5% in cash, to keep options open. I note Edmund Shing's article: https://www.stockopedia.com/co... that infers; to be invested 100% stocks is generally a good approach for the time we are in now and this is the reason why I am not considering a higher cash portion in my portfolio

However, as an investor, I find it very hard just to hold cash. It won't earn any interest and will be subject to inflationary decline. Therefore, I think it makes sense to push the cash in to an ETF instead. I'm thinking ETF rather than a Fund due to the lower costs. Also, selling an ETF is quicker than selling a Fund, so cash can be made readily available. I am thinking an ETF that follows property may be a good idea, as this should be defensive to a down turn in some of the growth areas we are seeing. Also, having an income return will further protect the holding.

Do you agree with this approach? Are you doing something similar? Can you recommend an ETF / other approach which you use to hold and make cash readily available for investing?



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