Setting funds aside as cash 'provides security'

Thursday 13 October 2011

Article by Mozo

Aussies that put cash aside in savings accounts and term deposits could provide themselves with a buffer in the event of another global financial crisis, an expert has asserted.

Savings accounts 'could be a good way to protect against another global financial crisis'

Speaking to the Sydney Morning Herald, managing director of Professional Wealth Doug Turek suggested that some funds should be kept as cash rather than shares for this reason.

"If you prudently set aside enough funds in bonds and cash in advance of a GFC, and we don't know when there will be another one, you can sleep well," he stated.

Mr Turek added that it could also prevent Aussies from being forced to sell assets and may ensure they have a "more financially secure retirement".

Those whose asset allocation is wrong and leans too heavily on shares may find they are forced to sell at a low price and do not get the full value of their investments back.

Minutes from September's meeting of the board of the Reserve Bank of Australia suggested that Aussie households are exhibiting a cautious approach to their finances, with many opting to save rather than spend.

Have a question about term deposits? Ask the money gurus at Mozo Answers. ADNFCR-1761-ID-800757844-ADNFCR

Compare today's top term deposits

Back to top