How much free funds/cash should I have?

Hi. Started investing back in April. Had a lump sum to start with and been investing at least £100 a month since then. Made a few mistakes initially selling when seeing small gains and buying what I thought was better investment elsewhere. Now have portfolio of 25 companies which I happy to stick with long term and keeping investing around £100 month in existing companies I own shares in. It been going well so far and around 17% up overall. I currently don’t have any free funds/cash. Rightly or wrongly I feel at moment only way is up. I do worry about a deal being down regarding brexit as all shares are in uk however I hope/expect a deal will be done but was wondering does anyone else keep some free funds/cash aside for drops like seen earlier in year? If so what sort of percentage of overall portfolio value do you have as free funds/cash. All investments are long term but I’m not sure if/when I should start leaving some as free funds/cash.

This comes back to a commonly discussed topic of investing.
3 commons ones are:

  • Dollar cost averaging
  • Lump sum investing
  • Value averaging

Over the long term, lump sum investing seems to pay off, although in the short term - value averaging comes out best.

People might mention, if all of your stocks in the UK - that you have not diversified enough. But it all comes down to your own trading preference or strategy.

I think go with your gut feeling. It wouldn’t hurt having a bit on the side just in case, but likewise if your goals are long term, then just invest what you want in one go.

No right or wrong answer - sorry.


what @adm is right! it’s really about what works best for you.

On the account I used for short-term investing I always try to have 15 -25%% cash, this naturally grows as I buy and sell… in my long-term portfolio it’s around 15% unless I’m forced to sell because of market activity. I personally hate not having any cash in my account if makes me feel trapped.


I have felt that feeling many times lol. Still do 0% cash/bonds atm though. Recently what I’ve done when prices have dropped and I want to buy more is to sell the stock and rebuy the leveraged instrument. Way more risky obvs.

I think for the moment I’ll keep doing what I’m doing. I’m fairly happy to keep buying shares each month and having no free/funds but interesting points made and appreciate replies. I think I’ll wait for FTSE to reach similar level to was in jan before I consider putting some free funds/cash aside. This could take a while.

Keep tabs on Companies in case the Fundamentals change or the Team leaves as those can be indicators that the Company may be going in thw wrong direction.

Otherwise try and buy shares when they look like good value. Ensure each company you buy isn’t with any emotion attached.

I keep no free cash. Holding cash is like keeping it in a bank, its just dead.


Since deposits are instant there is no difference if you’ll keep money on T212 or in your bank account to be honest

@Mattydee I too have most of my shares in UK but with international operation so could be diversified.

Regarding Brexit, i worry that current stock market prices hasn’t factored no deal brexit.

So…to sell now and buy back later is the question, how can one time the market ie catching a falling knife…

I personally rarely have much cash in T212 account as invest it all (i do weekly small deposits) but I have savings on side which I mentally know I can dip into if any crazy value dips happen, like recent Alibaba dip.

However my portfolio is small so if you have a large one it probably outwights your savings so might be worth having allotted cash in your T212 account.

My bank account is for cash, so trade 212 is 0% cash

My view is that there are two parts.

  1. Ensure you have enough in easy access cash to cover 6 months of bills - an emergency fund as such.
  2. Any additional funds that you wish to invest, should be invested based on your risk appetite. You’ll generally find younger people are happy to accept a higher risk for a potential higher long term return, and those with larger investment balances, or more aged, might then look to protect capital and hold more cash type intstruments.

There is no right or wrong answer, nor one size that fits all.