John_Maxwell_IV comments on How to improve EA Funds - Effective Altruism Forum

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Comment author: John_Maxwell_IV 05 April 2018 11:25:45PM 1 point [-]

looking into the best ways of not holding the balances in cash

A possible approach to this problem is to have a mixture of liquid and illiquid assets. Suppose an EA fund has $500K, with $100K in very liquid assets, $200K in moderately liquid assets, and $200K in fairly illiquid assets. Suppose the fund manager decides they want to give all $500K in the fund to a specific organization. In that case, they could give $100K to the organization immediately, which would hopefully tide them over until the $200K in moderately liquid assets became available, which would hopefully tide them over until the remaining $200K became available.

Comment author: MichaelDickens  (EA Profile) 19 April 2018 02:18:37AM 0 points [-]

Almost all typical assets--bonds, stocks, commodities--are highly liquid, in the sense that if you decide to sell them, you can convert them into cash in a few minutes max. So even a well diversified portfolio can still be liquid. The main exceptions are real estate and private equity, but I see no reason why EA Funds need to hold those.