How much cash should a long-term portfolio hold?

At a time when financial markets are volatile and interest rates are rising, cash has greater appeal than it has done for some time. However, while it has a role for capital protection and optionality, it has limitations and there may be better options to enhance the risk/reward characteristics of a portfolio. After more than a decade where cash returns were at or near zero, in 2022 rising interest rates saw cash rates lift. At the same time, bond and equity markets fell in parallel. The long duration trade that had supported areas such as technology and long-dated government bonds rever...