What place does cash have in a portfolio? Some advisors tend to dismiss it - particularly in the current interest rate environment. But consider the impact of cash returns (best case, worst case and actual case) in a broadly diversified, 12-asset portfolio.

Cash has hardly been most everyone's whipping boy. During the 34-year period from 1948-1981, the federal discount rate trended upward, rising to a now-astounding 13.42% from 1.34%. During this time frame of rising rates, the 34-year average annualized return for U.S. cash (as defined by three-month Treasury bills) was 4.49%.

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