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By Jason Stipp | 08-25-2009 04:30 AM

Where to Stash the Cash

Morningstar's Christine Benz offers tips for comparing cash-like investments and squeezing extra yield from your cash reserves.

Jason Stipp: I'm Jason Stipp with Morningstar. We talk a lot here at Morningstar about where to put your investment dollars; which stocks, which funds, which ETFs--but another important consideration is where to put those assets that aren't invested, or at least that aren't invested right now: your cash.

Here to talk with me a little bit about your cash holdings is Christine Benz. She's Morningstar's director of personal finance. Nice to see you again Christine.

Christine Benz: Hi, Jason. Nice to be here.

Stipp: So, over the last year, a lot of people have been spooked by the market, and all the volatility that we saw. A lot of them went to cash, or they got out of the market entirely is what we're hearing from a lot of our members.

We're not talking today about "You should be in all cash today, " or "You should stay in all cash." That's not really what we're addressing here today, but there are some general reasons why you might want to have a cash stake. So what are some good reasons, just rules of thumb, to have a little bit of your assets in cash?

Benz: Everyone should have some cash on hand, and I would say if you're still working, one of the key reasons is in case you lose your job.

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