Kathy Kellert

But you can pair that, whether it's

For VT, pairing it with a bond fund, for example, to make sure you really have that broadly balanced fund.

Or you could pair it with, maybe you want to pair with active managers, as I mentioned.

Maybe you have a view on how you might want to tilt your portfolio and pair it, maybe a growth overlay in this market environment.

Or maybe you want a tilt away from a certain sector.

You could add other sectors.

Yeah, I think there's a real cost to holding cash in your portfolio.

A few things.

If it is part of your long-term asset allocation, it can make sense for some investors.

However, if you're holding cash because it feels comfortable in a time that's uncertain and there's a lot of market volatility, that's where my comment about there being that maybe silent cost of cash.

The way I think about it is...

It is common that investors want to go to cash in these environments where maybe the market has big swings or big sell-offs.

And again, working with our research team, we have found that in days when there are big sell-offs, those big market days tend to be clustered, the good and bad days together.

And by sitting in cash, you miss those periods of market recovery that tend to be very large contributors to the long-term returns of a portfolio.

And then cash also is eroded, the value of it by inflation over time.

So you have to be careful in our findings is sticking with a long term strategy that's not going to cash, that's managing through the ups and downs is typically a key for long term investment success.