Is holding too much cash a mistake? Here's why that may lead to regrets, experts say

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Record returns on cash may distract investors from higher potential gains in stocks, experts say. Here's how to strike a balance.

Yet stocks are also climbing to all-time highs.Some experts are now warning it's possible to get too comfortable with those super safe returns and miss out on bigger market returns.

"The bigger issue that not enough people are talking about is the fact that younger investors are overallocating the cash because of the allure of the 5% savings rate," Cox said in an interview with CNBC.com. "But anything beyond five years, I would seriously consider putting that money into stocks or other more risky assets," Cox said.Fear may be one reason why investors are tempted to sit on the sidelines in cash now."Market timing is truly a fool's errand, but lack of participation in the market is also foolish, particularly for long term investors," said Mark Hamrick, senior economic analyst at Bankrate.

 

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