When her son seriously injured his leg, Hetty made the rounds of the free clinics, hoping to get him treated as a charity case. Yet she also outmaneuvered the rapacious and unscrupulous men who dominated America's 19th century money frontier at a time when women weren't accepted in business or finance. You can bet that Hetty always had plenty of cash on hand. Whenever the stock market went through one of its periodic panics, she had the money to pick up good companies and properties on the cheap. Today, many investors treat cash as trash.
Cash drags down performance.
Yet cash is exceptionally valuable for the investment opportunities and options it opens up whenever the market takes a severe downturn. I don't know when a big market crash will happen. It could be next week, six months from now, or in three years. But when it does, having cash on hand will pay off enormously. Farrell is contributing economics editor for Business Week and co-host of Minnesota Public Radio's Sound Money .