When SMI has written about managing cash, typically it’s been in the context of building a savings reserve via a bank-based savings account. We haven’t focused much on the cash-management options within brokerage accounts because, until somewhat recently, SMI’s specific investing strategies haven’t called for “cash” allocations.

Times are changing. Cash is one of the six asset classes from which we choose in carrying out SMI’s Dynamic Asset Allocation (DAA) strategy, launched in 2013. In addition, the new “2.0” defensive protocols introduced this year to SMI’s Fund Upgrading strategy occasionally will shift some holdings to cash. So it’s a good idea to become familiar with the cash options your brokerage firm has available.

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