From CNBC: 2025-04-15 09:45:00

Investors may consider moving to cash amid stock market turmoil, but it can be risky for long-term savings. Cash offers stability but historically lower returns than stocks. Heavy cash holdings may hinder long-term investment goals, requiring more savings. Recent tariffs and trade war fears led to a stock market sell-off.

Cash provides liquidity for emergencies, but historically offers negative real returns after inflation. Holding 100% cash can lead to wealth erosion over time. Stocks have growth potential but come with risks. A diversified portfolio balancing safe and risky assets is essential for financial stability.

Investors in accumulation phase should keep enough cash for emergencies and short-term needs, allocating the rest to stocks and bonds based on time horizon and risk tolerance. Retirees need cash for income needs and major purchases, with the rest in a diversified portfolio for long-term growth. Stick to an investment strategy through market fluctuations.

Read more: Cash may feel safe when stocks slide, but it has risks