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On the Mark: Risks of Excess Cash

On the Mark: Risks of Excess Cash

February 07, 2024

Risks of Excess Cash

Investors took advantage of higher interest rates in the aftermath of 2022’s bear market. Assets in money market funds soared to nearly $6 trillion at the end of 2023.

For investors, cash became a great place to park savings and earn roughly 5% interest. With cash accounts and related investments providing competitive yields not seen in the last decade, it can give investors a false sense of security as a no-risk investment choice.

Cash is often the best option for meeting near-term spending needs. But before declaring cash is king, holding too much cash beyond emergency or near-term needs comes with risks as well.

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