Daily Gains Letter


In addition to stocks and bonds, cash (and cash equivalents) are one of the three main asset classes. Cash equivalents include U.S. government Treasury bills, bank certificates, corporate commercial papers, certificates of deposit (CDs), and other money market instruments.

When looking at a company’s balance sheet, cash and cash equivalents report the value of a company’s assets that are cash or can be immediately converted to cash.

Cash and cash equivalents are not terms exclusive to publicly traded companies. Cash and cash equivalents are also found in individual investing portfolios. Money market instruments such as short-term Treasury bills, CDs, and savings accounts fall under the heading of cash and cash equivalents.