Why Loading Up on Cash Securities Might Make Sense

While most economists and investors remain bullish on the overall stock market and recent evidence suggests that the so-called Goldilocks scenario will come to fruition, there is a strong case for choosing cash securities over equities in today's market environment. Money market funds, high yielding certificates of deposits, and t-bills offer exceptional rates at the moment. Check out the following data:

3 Month T-Bill 5.00%
6 Month T-Bill 4.92%

Vanguard Prime Money Market Fund 5.10%
Cash Management Trust of America 4.78%
Fidelity Money Market Fund 4.95%
Fidelity Cash Reserves 4.93%

1 Year CD from Vanguard 5.35%
6 Month CD from Vanguard 5.30%


Considering that the annual performance of the S&P 500 for the last five years has only averaged slightly over 7% and that the above securities are, for all practical purposes, risk free,
investors who might not invest in such boring assets should take a second look.