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How and When Should I Invest my Excess Cash?

Updated: Aug 20, 2021

A popular reason clients come to us is that they have a large amount of cash — and want to make sure they’re investing it at a good time. Maybe they had a significant liquidity event, sold their company, exercised their stock options, were paid a large bonus, or even received an inheritance. The first question on clients’ minds is nearly always, “When and how should I invest the cash into the market?”

When people find themselves with excess cash on their hands, it can be challenging to know whether to invest now or hold the cash for a more suitable time. Part of that dilemma is psychological. It’s hard to let go of a massive amount of money and simply trust the market with it. And while it’s generally a good idea to invest all excess cash outside of someone’s cash target, there are still options for clients who aren’t comfortable doing so right away.

It comes down to whether someone is an emotional or rational investor. Neither approach is “right” or “wrong,” and we offer paths for both preferences.

What do I mean by that? Watch the video below to hear our CIO Aaron Tuttle, CFA, CFP®, CLU®, ChFC® and I explain the difference between emotional and rational investing, as well as how we can work with either preference to get your cash invested properly.


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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

All indices are unmanaged and may not be invested directly. The economic forecasts outlined in this material may not develop as predicted, and there can be no guarantee that the strategies promoted will be successful.

All investing involves risk, including the possible loss of principal. No strategy assures success or protects against loss.

Securities and advisory services are offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.

No strategy assures success or protects against loss. Investing involves risks including possible loss of principal.

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