Cash Position Optimization for ETF Investors: Emergency Fund Benchmark
Key FindingsOptimal emergency fund benchmark: 4–6 months of living expenses relative to assets (e.g., $3,000/month × 4–6 = $12,000–$18,000)During the 2008 financial crisis, investors with less than 3 months emergency reserves showed a +45% higher probability of panic selling (Morningstar data)For VOO/SCHD with $700/month contributions over 20 years, maintaining 15% cash versus 0% resulted in cumulative return difference of ±3....
