Serving the needs of Tucson, AZ, clients, Jake Kagele leads NOVA Financial Services and provides tailored advice that meets the needs of individuals, trusts, foundations, and corporate entities. One area that Jake Kagele has extensive knowledge in is designing an allocation strategy that is properly diversified.

A recent CNBC article brought focus to the importance of cash holdings within a portfolio mix, particularly during times of high volatility. One aspect of this involves setting aside an emergency cash savings account that will cover all foreseeable expenses over a three-to-six-month period.

For those who have retired, another element is maintaining investments totaling two to three years of income, in holdings that are not subject to loss of value through exposure to the securities markets. Cash accounts are often a major component of this type of allocation.

While cash holdings may eliminate many short-term risks, they do not mitigate the steady erosion of capital due to inflation and cost-of-living increases. For those with a long-term perspective, the stock market should be a central focus, as it has historically always headed in a higher direction, whatever the short-term headwinds, and surpassed previous records. The moment when average investors have dialed back equity holdings and moved to safe havens such as cash may indeed be the best time to purchase stocks for value.