Cash Investments and/or Cash Equivalents: Short-term investments that earn interest on your principal. What sets cash investments apart -- is their liquidity. They can go from investment in your portfolio to cash in your hands -- fast. And chances are good you won't lose money in a quick cash-out. By contrast, sell a stock quickly to cash-out, and chances are 50/50 you'll lose. In the big picture, cash investments in your portfolio can be like a buffer -- against the ups and downs of your more volatile assets, like ca-ray-zee stocks. Plus, their liquidity and price stability means cash equivalents can play a part in both your saving and investing strategies.