Is Cash King?

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While the origin of “cash is king” is unclear, it is a phrase that became popularized following the global stock market crash of 1987 by Pehr G. Gyllenhammar, then CEO of Swedish car group Volvo.

Cash is flexible and can be likened to short term personal insurance against negative life circumstances. That is one reason advisors recommend clients hold 3-6 months of expenses in cash to mitigate job loss, etc. 

“Money often costs too much.”Ralph Waldo Emerson

The last decade has been abysmal for cash yields. If we consider the 1 month T-bill as our cash proxy, from 10/1/2012 – 9/30/2022, the annualized return was +0.61%. Meanwhile, inflation for the decade was +2.52% (actually below the long term trend of +2.9% per year since 1926). 

So, over the last 10 years, the purchasing power of cash savers eroded as inflation crushed cash returns by about 1.91% per year. 

In late 2022, we are in a vastly different environment with cash and inflation. So, what should you do with your excess cash or emergency fund? Where should you put it? In a regular savings account? A CD? Treasury bills? 

Here are some rates we’re seeing as of 11/14/22. Check with your local bank or do your due diligence on how you can better put your cash to work.

Cash Management by Time Frame

Immediate Access (Access within 3 days)

Source: MaxMyInterest (Online banks)*

Short – Intermediate Term (3, 6, 9, 12 months)

T-Bills: Source Bloomberg as of 11/14/22

Long – I-Bonds (12 months+)

If you have questions or do not think you are optimizing your cash holdings, please feel free to reach out. We are always here as a resource for you and your loved ones. 


This newsletter is distributed for general informational purposes only and is not intended to constitute legal, tax, accounting or investment advice. No part of this newsletter nor the links contained therein is a solicitation or offer to sell investment advisory services except where applicable in states where we are registered, or where an exemption or exclusion from such registration exists. Information throughout this newsletter is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness, accuracy or completeness of this information and the information presented should not be relied upon as such. All investments involve risk of loss, including the possible loss of all amounts invested, and nothing within this newsletter should be construed as a guarantee of any specific outcome or profit. This newsletter may not be reproduced or redistributed in whole or in part.

*Asset Dedication is not affiliated with any of the banks named and no referral relationship exists between Asset Dedication and any of the banks named.

The information provided in this report is for informational purposes and should not be considered a recommendation or solicitation to purchase or sell any particular security or investment strategy. Investments are not insured, subject to market risk, including the loss of principal. Investment strategies described may not be suitable for all investors. Equities are subject to market risk meaning that stock prices in general may decline over short or extended periods. The information contained does not consider any investor’s investment objectives, particular needs, or financial situation. Nothing in this material constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate. Information in this presentation has been obtained from sources believed to be reliable but cannot be guaranteed. Additional information is available upon request. Information contained herein is subject to change without notice.

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