How much cash do investors hold? M1 data
As of Q1 2026, M1 investors hold 5.2% of their portfolios in cash on average, according to M1’s proprietary platform data.
That figure is M1’s Cash Allocation Rate. It measures the share of portfolio value sitting in cash rather than deployed into investments.
What is cash allocation?
Cash allocation is the portion of an investment portfolio held in cash or cash equivalents rather than deployed into securities. Generally, portfolios may carry some level of cash allocation — whether from uninvested deposits awaiting deployment, proceeds from recent sales, or a deliberate strategy to hold available capital.
Cash sitting in an investment account is not the same as cash in a bank account. It occupies space in the portfolio without being invested, which means it is subject to cash drag — the performance cost of holding uninvested capital. How much cash to hold, and when to deploy it, depends on an investor’s strategy, time horizon, and market outlook.
Cash holdings within an investment account do not carry FDIC insurance unless swept to partner banks through a deposit program. Cash in a brokerage account may be covered by SIPC protection up to applicable limits in the event of broker-dealer insolvency. SIPC does not protect against market losses or declines in investment value. Investing involves risk, including the possible loss of principal.
What is the Cash Allocation Rate?
The Cash Allocation Rate is the percentage of total portfolio value held in cash across active investor accounts.
Formula: Cash Allocation Rate = (Total Cash Held ÷ Total Portfolio Value) × 100
M1 introduced this metric as part of a recent M1 investor data report, a report that publishes aggregate, anonymized data from M1’s investor base.
What M1 data shows: average cash in a portfolio
M1’s Cash Allocation Rate as of Q1 2026: 5.2%
M1 investors hold 5.2% of their portfolio value in cash as of March 31, 2026. This figure is drawn from aggregate, anonymized portfolio data across active M1 accounts.
| Source | Cash Allocation Rate | Notes |
| M1 portfolios (Q1 2026) | 5.2% | Share of total portfolio value held in cash. Active accounts. Aggregate, anonymized. As of 2026-03-31. |
M1 publishes this figure as part of its commitment to data transparency — so investors can see how cash behavior actually looks across M1’s platform, not just in a hypothetical model.
This is not a recommendation to hold any specific cash allocation. Individual approaches to cash management vary based on financial goals, risk tolerance, and time horizon. Investing involves risk, including the possible loss of principal.
How much cash do investors typically hold?
M1’s 5.2% Cash Allocation Rate reflects the share of portfolio value sitting uninvested across M1’s individual brokerage, retirement (IRA), and high-yield cash accounts as of Q1 2026 — deposits awaiting deployment, proceeds from recent sales, and available capital not yet allocated to securities.
A 5.2% cash allocation means that, on average, roughly $5.20 of every $100 in an M1 investment account is sitting in cash rather than deployed into securities. The remainder — 94.8% — is invested.
This figure is a snapshot of one point in time. Cash allocation levels can shift based on market conditions, investor inflows, pending trades, and individual strategy. It does not represent a target or recommended level.
Why the Cash Allocation Rate matters
Cash allocation can be an often-overlooked variable in a portfolio. According to Morningstar, cash averaged 3.66% in annualized returns since 1926, compared to 9.81% for stocks. That cost has a name: cash drag. M1’s Cash Allocation Rate puts a number on it — at 5.2%, M1 investors are holding a relatively small share of their portfolios in cash.
Whether 5.2% is “too much” or “too little” depends entirely on individual circumstances — investment timeline, liquidity needs, near-term deployment plans, and risk tolerance. No aggregate benchmark can answer that question for any individual investor.
Frequently Asked Questions on Cash Allocation
A cash allocation rate measures the percentage of total portfolio value held in cash rather than invested in securities. M1’s Cash Allocation Rate as of Q1 2026 is 5.2%, based on aggregate, anonymized data from active M1 accounts.
This is not a recommendation to hold any specific cash allocation. Individual approaches vary based on goals, time horizon, and risk tolerance. Investing involves risk, including the possible loss of principal.
As of Q1 2026, M1 investors hold 5.2% of their portfolio value in cash on average, according to M1’s proprietary platform data. This figure reflects M1’s active investor base only and should not be interpreted as a universal benchmark. Individual cash allocation levels vary significantly based on investor strategy, market conditions, and timing.
Cash drag refers to the performance cost of holding uninvested cash in a portfolio. According to Morningstar, cash averaged 3.66% in annualized returns since 1926 versus 9.81% for stocks — and the difference may affect portfolio growth over time. The Cash Allocation Rate measures how much cash investors are actually holding. M1’s Q1 2026 figure of 5.2% reflects aggregate cash behavior across active M1 accounts.
Past performance is not indicative of future results.
M1 calculates the Cash Allocation Rate as total cash held across active investor accounts divided by total portfolio value, expressed as a percentage. The Q1 2026 figure of 5.2% reflects data as of March 31, 2026. Data is aggregate and anonymized — it does not represent any individual account. M1 publishes this metric as part of the recent M1 investor data report, a report on investor behavior across M1’s platform.
Learn more about investing with M1.
This content is for educational and informational purposes only and does not constitute personalized financial advice. All data reflects aggregate, anonymized M1 portfolio trends as of Q1 2026 and does not represent any individual account. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
SAIF-04232026-dltgn15b
