Re: Cash Alternatives.................
Hi R, Almost anything you do with the cash will have higher risk than money market funds or a savings account. The biggest risk going forward will be interest rate direction. That said, there are some things one can buy that yield a bit better and have relatively low interest rate risk.
SHY is a 1-3 Year Treasuries fund. With the short duration the interest rate risk is relatively low and the recovery should be quicker when there is a move upward in interest rates.
HYS is another shorter term income fund. It invests in corporate short term debt. The quality isn't stellar, but the short duration at least keeps the interest rate risk more moderate. The yield is quite good.
Maybe a blend of money market funds, SHY and HYS could give you some improvement in yield on cash while keeping the risk somewhat moderated.
The last thing you want to have happen is to have your "cash and equivalents" going down at the same time your equities are. Then you're forced to sell something at a loss to buy some more of something else that has been falling in price. This isn't a comforting thing to do.
Best regards,
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