A consistently high cash allocation may prove detrimental to investors' retirement, according to the 2016 Legg Mason Global Investment Survey.
The survey of 500 affluent U.S. investors conducted from December to January found that the average asset allocation to cash in 2016 is 23%. This is a slight increase from the 2015 and 2014 surveys, in which 22% was the average cash allocation. Legg Mason defines an affluent investor as someone with a minimum of $200,000 in investable assets not including their home.
"Certainly, having a 23% allocation to cash is almost the one strategy that guarantees you won't achieve your objectives," Tom Hoops, executive vice president at Legg Mason said.
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