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How to Use Cash Management

By default, Passiv assumes that you want to stay 100% invested but what if you wanted to do dollar-cost averaging? This is where cash management rules comes in. Users can apply two types of cash rules to their portfolio groups: "retain at least” and “allocate at most”. Both rules adjust the calculated trades that Passiv would normally display. Helping you to allocate new cash gradually or withhold a specific amount of cash for some future purpose

Allocate at most

If you want to do dollar-cost averaging, allocate at most is a very effective way to space out your purchases. When you set this type of rule, the dollar amount specified is the maximum amount of cash that Passiv will attempt to allocate in a single set of trades. As you place trades your accuracy will get closer to 100%.

Retain at least

If you want to keep a fixed amount of cash in your account, retain at least is the option for you. This ensures that Passiv's calculations will keep a minimum amount of cash in the specified account. This comes in handy if you'd like to have some cash sitting on the sidelines as you do research. When this rule is enabled you will not be able to get to 100% accuracy as not all of your cash is allocated or accounted for in your target portfolio.

Note that Cash management rules apply on a cash-equivalent basis for all securities in the account. For example, if you have a rule to allocate at most $1,000 CAD, Passiv will allocate up to $1,000 CAD of value in cash in whatever currencies are available, including whichever securities are most appropriate to buy. If you don't want to incur conversion fees, you can enable currency handling settings.

Where do I find Cash Management options?

You can find these options in the Portfolio Settings tab for each portfolio group.

If you want to use cash management, click on Add Rule.

Then decide:

  • In which account the rule will be used
  • If you want to Allocate at most or Retain at least
  • The amount of cash and its currency

When you’re done, click Submit.