As an unexperienced investor, can someone explain the portfolio breakdown of cash in freetrade?
I donāt understand why you would keep cash just sitting in freetrade when it could be sitting in lots of different places like isas or just using the money to buy stocks?
I understand you can get 3% on plus but without plus I donāt see any advantage unless itās targeted to day traders but freetrade doesnāt seem like the platform for that?
I tend to build up cash in FT so that, when I spot something I want to invest in, Iām not having to wait for my deposit to turn up from my bank. Also, I donāt think Iāll miss the 0.3p interest I might have earned!
Well my cash is sat there ready to be invested if I see anything that takes my fancy, itās around 10% the total which is what Iāve seen some suggest in the past. However I suppose itās easy to buy and sell as you want quickly now so it might be better invested in something safe which can be accessed easily as needed. But 3% isnāt bad.
Agree with Tony, for me itās a bit of a convenience thing to have cash ready ājust in caseā although deposits into FT are pretty fast these days. Nevertheless there isnāt really a great place to keep cash atm, I used to put it into premium bonds but they take ages to withdraw and then transfer into FT if there was a big opportunity.
Also donāt forget that depending on the time of year, I.e. nearing the end of March some people just put cash into their isa to not lose their allowance (especially if you donāt think itās a good time to invest at that point)
Youād keep cash in Freetrade thatās waiting to be invested.
Because youād have allocated that money for investing, or itās in cash in the ISA account waiting to be invested.
Since investing isnāt meant to be an impulse game lots of people have large amounts of cash sitting around for the particular opportunity theyāre waiting for.
You need to have cash easily available anyway, not in stocks or bonds. Thinking that cash for emergencies (or future opportunities) is wasted money is a big mistake IMO.