1. Investors should first determine how much cash they truly need to hold. A good benchmark is to prepare enough to cover the net funds expected to be withdrawn from the portfolio over the next 2-5 years, avoiding forced asset sales during market downturns. Holding more cash than this level suggests the funds may not be being used effectively.
2. Currently, many investors are hesitant to invest due to concerns about future market crashes, but UBS states that the current market environment remains relatively positive for investment. Funds can be further divided into three categories: daily cash, core liquid funds, and investment funds, balancing liquidity, risk diversification, and returns respectively. For excess cash, UBS does not recommend holding it all in cash, but rather allocating it more strategically among short-term liquid funds, fixed-term deposits, and high-quality bonds.
3. For funds ultimately intended for investment, rules can be established in advance to gradually invest in the core portfolio when market declines reach a certain level, or to entrust management to professional institutions. This reduces the impact of repeatedly timing the market due to fear of market highs and fear of corrections. (The above views are from a UBS report dated September 7th.)
