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Putting Your Cash to WorkVideo

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Description: As the economy improves, people may find they are holding onto excess cash. Putting your cash to work in a thoughtful way can help you progress toward your long-term investment goals.

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Length (seconds): 221

Transcript: <h2>Note:</h2> <p>Upbeat synth music plays.</p> <p>Legal disclosures appear.</p> <h2>On Screen:</h2> <p>Investment and Insurance Products:</p> <ul> <li>Not a Deposit;</li> <li>Not FDIC Insured;</li> <li>No Bank Guarantee;</li> <li>May Lose Value;</li> <li>Not Insured by Any Federal Government Agency;</li> </ul> <h2>On Screen:</h2> <p>J.P. Morgan Wealth Management logo.</p> <h2>On Screen:</h2> <p>A bearded man with short black hair and brown eyes, Jordan Jackson, speaks from his home office.</p> <h2>Jordan:</h2> <p>Everyone needs cash. After all: you can't pay for your lunch with stocks.</p> <h2>On Screen:</h2> <p>Jordan Jackson, Global Market Strategist, J.P. Morgan Asset Management.</p> <h2>On Screen:</h2> <p>Video clips show an airplane flying into an orange sky, the inside of a restaurant, and a picture of $20 bills.</p> <h2>Jordan:</h2> <p>But while some people may have been able to save money by not traveling or eating out less this year, holding too much cash on the sidelines rather than investing it can be a drag on achieving your overall financial goals. The reality is: yields on cash are extremely low. So it may be a great time to make sure that your cash is working most effectively for you.</p> <h2>On Screen:</h2> <p>Video clips show a person putting money in a cash register and a digital board displaying stock market information.</p> <h2>Jordan:</h2> <p>To show us how and why, let's take a look at the Bird's Eye View.</p> <h2>Note:</h2> <p>Mystery music plays.</p> <h2>On Screen:</h2> <p>Mr. Jackson takes a pen, writes in his notebook, and then moves the pen and notebook to the side of his desk. Then, he speaks to the viewer.</p> <h2>On Screen:</h2> <p>Bird's Eye View. Putting Your Cash To Work.</p> <h2>Jordan:</h2> <p>For starters, I think it's helpful to take a bucket approach in organizing your money. First, let's focus on filling up the liquidity bucket.</p> <h2>On Screen:</h2> <p>An animated illustration appears of a bucket filling with liquid.</p> <h2>On Screen:</h2> <p>The Bucket Approach. Liquidity – Within the next 36 months.</p> <h2>Jordan:</h2> <p>This is the money for your everyday living expenses, rainy day funds, or anticipated tax obligations.</p> <h2>On Screen:</h2> <p>A video clip shows someone filling out a check.</p> <h2>Jordan:</h2> <p>Generally, the money in this bucket should be held in a place where you know you could easily access it. Depending on your liquidity needs, there are other short-term products offering income potential. Once you feel confident that your liquidity bucket is full, you can start to think about the other two buckets.</p> <h2>On Screen:</h2> <p>Animated illustrations of two more buckets appear next to the &quot;Liquidity&quot; bucket. One new bucket is marked &quot;Lifestyle - For many years to come.&quot; The other is marked &quot;Surplus - For your legacy.&quot; Both buckets fill up to the top.</p> <h2>Jordan:</h2> <p>There are meant to fund your lifestyle for years to come and help you achieve longer-term financial goals like gifting to charity or passing onto loved ones. This is the money that you might think about investing in the market, so that it can grow over time and work toward the achievement of those goals. So, first ask yourself how much money you might actually need in that near-term liquidity bucket.</p> <h2>On Screen:</h2> <p>A money counting machine dispenses paper currency.</p> <h2>Jordan:</h2> <p>If you find that it's overflowing with cash, it's time to start putting that excess cash to work. Like I said, the interest you're receiving on cash really isn't doing anything right now.</p> <h2>Note:</h2> <p>Uplifting music plays.</p> <h2>Jordan:</h2> <p>Now that's not really an issue if you're going to be spending it in the near term. But over the course of multiple years, it means that the purchasing power of that cash is going to erode. That's because inflation makes stuff more expensive over time.</p> <h2>On Screen:</h2> <p>A bar chart appears, labeled &quot;Holding cash is expected to erode purchasing power over the next few years.&quot; It shows the purchasing power of a hundred dollars at:</p> <ul> <li>$100 in 2020;</li> <li>$99 in 2021;</li> <li>projected to decrease to $97 by 2022;</li> <li>and projected to decrease to $96 by 2023;</li> </ul> <h2>Note:</h2> <p>Small print text appears.</p> <h2>On Screen:</h2> <p>Source: J.P Morgan, Bloomberg Finance L.P. Fed inflation forecasts. 2023 data as of November 25th, 2020.</p> <h2>Jordan:</h2> <p>The next question is: how can I make my cash work harder? Depending on your situation, the broad answer is consider investing it in the market, whether it be stocks, bonds, or a mix of asset classes.</p> <h2>Note:</h2> <p>Funky music plays.</p> <h2>Jordan:</h2> <p>Stocks are the engine of growth in an investment portfolio.</p> <h2>On Screen:</h2> <p>A bar chart appears, labeled &quot;Rolling annualized total returns, 1950 through 2020.&quot; The chart shows:</p> <ul> <li>1 year stocks ranging between negative 41% and 60%;</li> <li>5 year rolling stocks ranging between negative 6% and 30%;</li> <li>10 year rolling stocks ranging between negative 4% and 21%;</li> <li>(and) 20 year rolling stocks ranging between 5% and 18%.</li> </ul> <h2>Jordan:</h2> <p>History shows that they can be one of the best ways to grow your capital over time, but may sometimes experience significant drawdowns in the near term. While they can have fits of volatility, we tend to think of them as long-term investments. Bonds, on the other hand, usually offer a better return potential than cash, but less upside than stocks. That's the tradeoff you make for a smoother ride since bonds tend to hold up better during periods of uncertainty, but are still riskier than keeping cash on hand.</p> <h2>On Screen:</h2> <p>Te bar chart labeled &quot;Rolling annualized total returns, 1950 through 2020,&quot; shows:</p> <ul> <li>1 year bonds ranging between negative 6% and 33%;</li> <li>5 year rolling bonds ranging between zero percent and 19%;</li> <li>10 year rolling bonds ranging between 1% and 14%;</li> <li>(and) 20 year rolling stocks ranging between 2% and 11%.</li> </ul> <h2>Jordan:</h2> <p>And, as you might expect, a blend of stocks and bonds may offer the best of both worlds. We're using a 50/50 proportion here as an example, but investors often tweak that composition depending on their time horizon, risk tolerance, and goals.</p> <h2>On Screen:</h2> <p>The bar chart labeled &quot;Rolling annualized total returns, 1950 through 2020,&quot; shows:</p> <ul> <li>a one year 50/50 portfolio ranging between negative 20% and 42%;</li> <li>5 year rolling 50/50 portfolio ranging between zero percent and 22%;</li> <li>10 year rolling 50/50 portfolio ranging between zero percent  and 16%;</li> <li>(and) a 20 year rolling 50/50 portfolio ranging between 5% and 14%.</li> </ul> <h2>Note:</h2> <p>Small print text under the Range of stock, bond, and blended total returns bar chart appears.</p> <h2>On Screen:</h2> <p>Source: Barclays, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P.Morgan Asset Management. Stocks represent the S&amp;P 500 Shiller Composite, and bonds represent Strategas/Ibbotson government bonds for periods from 1950 to 2017, then Bloomberg Finance L.P. Barclays U.S. Treasury Total Return Index from 2017 to 2020. Data is as of December 31st 2020.</p> <h2>Jordan:</h2> <p>Regardless, the consistent takeaway across all three options is that time is a powerful ally.</p> <h2>On Screen:</h2> <p>Video clips show a person examining a financial chart and a person counting about a dozen hundred dollar bills.</p> <h2>On Screen:</h2> <p>The Bottom Line.</p> <h2>Jordan:</h2> <p>The bottom line: making sure you have enough cash is a key component to a sound financial plan. But having too much just isn't doing you any favors. By putting your cash to work in a thoughtful way, you can progress towards your long-term investment goals.</p> <h2>On Screen:</h2> <p>J.P. Morgan Wealth Management logo.</p> <h2>Note:</h2> <p>Legal disclosures appear.</p> <h2>On Screen:</h2> <p>Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.</p> <p><strong>Past performance is not a guarantee of future results.</strong></p> <p>The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. Equity securities are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time. In general, the bond market is volatile and bond prices rise when interest rates fall and vice versa.  Longer term securities are more prone to price fluctuation than shorter term securities. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss. Dependable income is subject to the credit risk of the issuer of the bond.  If an issuer defaults no future income payments will be made.</p> <p>This video and its content have been developed for J.P. Morgan Securities LLC clients and prospects and is for informational and educational purposes only. It is designed to provide general market commentary and information relating to certain services offered by J.P. Morgan Securities LLC, an affiliate of JPMorgan Chase &amp; Co. Opinions expressed herein are those of the author and may differ from those of other J.P. Morgan employees and affiliates. The information in no way constitutes J.P. Morgan research and should not be trusted as such. Further, the views expressed herein may differ from that contained in J.P. Morgan research reports.</p> <p>The information and views expressed are not intended to provide specific advice or recommendations for any individual. You should carefully consider your needs and objectives before making any decisions. For specific guidance on how this information should be applied to your situation, you should consult your advisor.</p> <p>J.P. Morgan Wealth Management is a business of J.P. Morgan Chase and Company, which offers investment products and services  through <strong>J.P. Morgan Securities LLC</strong> (JPMS), a registered broker-dealer and investment advisor, member of FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provide by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase &amp; Co. Products not available in all states.</p> <p>Copyright {{copyrightCurrentYear}} JPMorgan Chase &amp; Co.</p>

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