Why Self-Control Remains Paramount in Today's Market

As the famed saying goes, "you learn to spend what's in your pocket" - a statement which can hold true when many investors consider whether to invest a cash balance or save the cash for a rainy day.

The thought process behind utilizing all (or near all) of the cash balance in a brokerage or retirement account is one which assumes that stocks will continue to rise, the bull market will continue, and any cash sitting in an account will be hurting the overall return of said account due to the fact that it will be earning little to no interest (or negative interest when factoring in inflation).

While it is true that cash is the worst investment anyone can hold, a philosophy held by some of the best investors of all time such as Warren Buffett, even Mr. Buffett has acknowledged the value of having a nice cash hoard available at all times to take advantage of deals that may arise when the time comes.

 For a guy who seems to hate having too much cash lying around, the near-$100 billion cash balance his holding company Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) has accumulated over the years sure puts the Oracle of Omaha in a nice position to take advantage of the next market downturn (and some analysts believe the next one will be a doozy).

Regardless of what happens, cash is king, and will be elevated above king status during the next correction (big or small), due to the fact that many investors simply will not have the liquidity to take advantage of deals, average down, and ride the next upward wave higher.

Invest Wisely, my friends.