Where do you park money if you want to stay liquid?

Looking where to put a meaningful amount of money to earn return without losing principal. I need to stay liquid though in case there is a capital call for a business to purchase.

Any suggestions?

 

That and some online checking accounts that offer +/- 2% yield annually. Ally Bank or similar, just make sure they're FDIC insured.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

A few questions, define the timeline on liquid, define the capital draw requirements, define the likelihood of capital call and return targets.

I would argue if the capital pool is large enough and the draw requirements are only a fraction of the necessary capital needs that real estate would be the best bet. You can always borrow against the asset(s) to "quickly" raise capital for other needs, the return profile will blow the other suggestions out of the water and it is a real cash generating asset. The rest of this stuff won't even top inflation.

Has some downside risk but I would aruge that in the short run it is very low and only a risk before you extract capital out of the asset.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

I have a short on oil majors for this exact reason. It is inevitable that they will have to reduce or eliminate dividends as they are all pretty much hemorrhaging cash. When this happens, the stocks will continue to slide.

 

Precious metals such as Gold,Silver,Platinum, or Palladium. If you have serious money, you get IF diamonds. The market of precious metals is very liquid, someone will definitely buy what you are selling, but it may take some time.

"It's okay, I'll see you on the other side"
 

Liquidity and risk tolerance are two very different things. The market is liquid but has risk. How much risk are you willing to mix with liquidity?

The thing about total liquidity is, after 30 yrs of PWM, I rarely see clients who actually use the liquidity. They just keep their money liquid but lose opportunity. How much do you really need liquid? Different answers if you're looking to stroke a down payment on a house vs. just keep liquid for a rainy day.

 

Depends on their goals. If they truly need $X liquid short term, cash (typical bank products). If they want upside growth potential with liquidity (no plans to use it but just want it available) there are all kinds of market products, managed acocunts, ETFs, UITs, Preferred stocks, etc. As long as they can earn more than bank products net of fees they're good to go. Again, if they need it available for a specific X, I'd keep it out of harms way but lots of folks just have nonqualified accounts sitting liquid forever. You're not going to put all that in low growth instruments for 10 yrs.

 

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