As Will Rogers once said, “you’ve got to go out on a limb sometimes, because that’s where the fruit is” If you don’t you’ll end up living on bank interest ie about 2.5% and run the risk that your principle will be eroded by taxes and inflation. can you afford to do that? Unless you are certain that the market is about to crash you would be mad to be all cash. If you think there is a 50-50 chance of a crash then wouldn’t it be more sensible to be 50% cash and 50% equities? or let’s say you think there is a 70% chance of crash wouldn’t it be better to be 70% cash and 30% equities? also a lot depends on your age. Markets always go up. If you are in 20s you probably don’t have to worry about market timing as you can stay in market knowing full well that you have got time on your side and that in 40 years you will almost certainly be ahead. However if you are 60 you probably only have limited time on the planet and you don’t want to be caught in down market and not having enough money to do what you want to do eg travel, by 4x4 campers etc. In that case, you could drop dead any minute and so may not have time to make up for your loses in a market downturn. Better to have cash to buy stuff
