Cash Position

The amount of cash or cash equivalents an investor, company, fund, or bank has on its books at a certain time. It is a sign of financial strength and liquidity and can help the company in times of distress. However, an overlarge cash position may be a sign that the company has no idea what to do with the cash.

When an investor or investment fund has a large cash position, it is usually a sign that he either finds few investments attractive (in a raging bull market where valuations are too high) or that he is pessimistic about the future. Most of the time,it is the latter scenario. See, “Mutual fund cash position” as well.