Invest or keep the Cash?

The market has come down 10% from its peak late last year and is in correction mode. I have some cash on the sidelines still and am wondering what to do with it. On the one hand, yields are coming down, and cash isn't earning much anymore. On the other hand, stocks could come down further. So, I guess I have a decision to make.

At the end of this month, I do have some funds going into index ETFs. With the market down a bit. this is the sensible thing to do. I put some more money into Berkshire at the start of the month, and I have already made 4% on this invested money. Berkshire is now my largest American stock. I thought at the start of the year that Fonterra would make a good addition to my portfolio. It would be a small investment, but because of the high yield, would provide a nice addition to my dividend income (assuming that they are able to continue paying out that dividend).

I have learnt the lesson on why it is important not to have more than 5% of my portfolio invested in any one stock. In saying that though, because it is so well run and diversified, Berkshire is one where the 5% rule could be broken. I don't have much cash in the American account though, as most of it has gone into Berkshire lately. I have thought that I will keep this cash on the sidelines so long as nothing major happens, e.g. another pandemic.

Infratil is not as big or as well diversified as Berkshire. They have three main investments, and about 50% of their portfolio is leveraged to AI demand in Australasia, through CDC Data Centres. I am sitting on a paper loss right now with Infratil, but Jim Cramer would say that this doesn't matter. It only matters where a stock is going, not where it has been. And I continue to think that Infratil is in a strong position to grow over the long term.

Channel Infrastructure is sitting just below $2, as it was a few months ago. It is enticing, because of the decent yield. But the yield is not as large as Fonterra's, and nor do I think it is as safe. Fonterra is the county's largest company and has a dominant global dairy business. If I wanted yield, that would be the stock to buy. But they have had a good run lately. I think I will wait till their price comes down a bit before I buy some shares. And with the rest of my NZX account cash I will make another lump sum ETF purchase later in the year. I will keep my term deposit reinvested, so I will have some dry powder if the market goes into a depression (not that I think it will).