Cash, Liquidity & Emergency Money

Before investing for growth, you need money you can reach quickly without selling at a bad time. Here is how big an emergency fund should be, where to keep it and how cash fits in a portfolio.

Why cash comes first

Liquidity means how quickly you can turn something into spendable money without losing value. Cash is the most liquid asset. Without an emergency fund, a job loss or big repair bill can force you to sell investments, possibly in the middle of a market decline, and lock in losses.

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