Balance Cash and Investments Wisely

Investors should evaluate their cash position carefully, distinguishing between funds needed for liquidity and those allocated for investment. For cash intended for investment purposes, it's important to reassess return expectations over the next 3, 5, and 10 years, adjusting asset allocation to optimize stock and bond mixes. A shift towards intermediate duration investments is advisable, as this area is expected to experience significant changes in interest rates, allowing for potential price appreciation along with attractive income. Longer duration fixed income assets can serve as a hedge against equity market volatility; they exhibit high volatility similar to equities but often see increased demand during market downturns, making them essential for risk management in a diversified portfolio.