We can’t blame you if you want to forget about 2020…

After the pandemic outbreak in March, the market crashed 34%. Then it rallied 64% to set a new all-time high.

More than 300,000 people have died from the coronavirus in the U.S. And as we transition into 2021, more than 12 million Americans are still unemployed.

Look, you never know what life will throw at you. And 2020 was a perfect example of that mantra…

The market could drop 50% and give you a rare shot to buy dirt-cheap stocks… You could lose your job, or your business could go bankrupt (as millions did during the pandemic)… Or a huge medical bill or lawsuit might blindside you.

That’s why you need cash.

You see, cash is the universal asset class because everyone needs it. At Palm Beach Research Group, we like cash because it provides optionality.

So how much cash should you have ready to cover life’s unpredictable events in 2021?

How Much Cash Should You Hold?

At PBRG, we use a highly diversified portfolio. It includes conservative investments… speculative plays… portfolio hedges… and true alternative assets.

And it’s worked spectacularly…

For instance, since launching The Palm Beach Letter on April 13, 2011, our recommendations have averaged annual returns of 132.6% through June 30, 2019.

But that’s all in the rear-view mirror now. We’re only looking to the future…

It’s a new decade. And we expect the market environment to change with it.

That’s why Daily editor Teeka Tiwari overhauled our asset allocation model in January… One that will continue to outperform the market in the 2020s.

We streamlined it by renaming some asset classes… and creating new categories to reflect today’s market realities.

The asset classes now include cryptos, collectibles, and private markets, as well as old standbys like gold, real estate, stocks, and bonds – and of course, cash. (Palm Beach Letter subscribers can read our annual asset allocation guide right here.)

While cash is still an asset we want to hold, we did adjust how much we allocate to it. We now recommend you keep up to 10% of your portfolio in cash.

That includes checking and savings accounts, money markets, CDs, and certain cash-like ETFs and mutual funds.

Now, physical cash and cash equivalents are must-haves for your portfolio. But Teeka has found a new type of income stream that can pad your savings…

A New Way to Generate “Cash”

There’s another way to generate income outside of cash. We call them Tech Royalties.

Tech Royalties is the name we’ve given to a subclass of crypto investments that pay you to hold them. They provide you with a steady stream of income that increases in value over time as the underlying cryptocurrency becomes more valuable.

Here’s how Teeka describes them…

Imagine owning a small stake in a portfolio of 10 music acts, and one becomes The Beatles while another becomes Elton John. This is the opportunity in front of you right now with Tech Royalties.

Some of these names will end up being worth hundreds of billions of dollars. It’ll be like owning a piece of The Beatles when they were playing nightclub gigs in Munich before hitting it big in the U.S.

You’ll own a piece of them and the income they kick out forever.

What’s great about Tech Royalties is you get capital appreciation along with monster 10%-plus yields.

Teeka and his team expect Tech Royalties to be the biggest crypto trend you haven’t heard of in 2021. (You can learn more from him right here.)

Be Prepared

If 2020 taught us anything, it’s that you should always keep some cash on hand.

Whether it’s for an emergency, a bear-market buying opportunity, or something else (like a pandemic)… you’ll be glad you have some when the time comes.

For example, you can use your dry powder to scoop up quality stocks like we did in March… Or you can make asymmetric bets on cannabis companies or crypto projects beaten down by negative sentiment.

When these assets recover, they’ll make 10 to 100 times your money – and in some cases, even 1,000 times.

Whatever life throws at you, cash typically “meets the need” better than anything else.



Chaka Ferguson
Managing Editor, Palm Beach Daily