"Over the last week partial profits have been realised from purchases during the last dip in early February. While I'm happy to raise the level of cash for short periods, it's preferable that this cash provides some return, while remaining fairly liquid so that it can be redeployed once opportunities are presented. With non-existent deposit rates, and many funds having sizeable spreads and fees, it's difficult to effectively employ these for short periods. I'm curious what instruments yourselves and other members of the community use to boost short-term returns on cash?

"On another note, I have found the increased fund and individual equity analysis of late highly useful. While personal due diligence is of course still required, the identification of themes and candidates has been both time saving and valuable."

David Fuller's view Thanks very much for the feedback and congratulations on seizing your opportunities. From a trading perspective, all of us understandably like to see a steady flow of market opportunities. It reminds me of the cartoon, which I often mentioned at The Chart Seminar, showing an old buzzard and a young buzzard sitting side-by-side on a branch. The young buzzard says: "I want to kill something now." The old buzzard replies: "Patience my son - wait for it."

Opportunities often come in bunches, followed by lean periods of greater risk and uncertainty. You and I can only deal with the reality that markets provide. When taking advantage of breakouts and momentum moves, as we are currently doing, always remember that these will work splendidly, for a while, and then momentum will change, often catching us out on the last trades opened. In Audios over the last two months, I have often repeated the adage: "Make hay while the sun shines." The sun has shone brightly over the last nine weeks but this too will change, if only temporarily.

Regarding the above question on cash, I can only speak for myself. I generally prefer to hold a significant cash reserve, which I manage on a medium-term basis (meaning several months to a year or two), as you may recall. Therefore I am not trying to 'box clever' in terms of every perceived opening. Also, one is restricted, without going to extraordinary lengths, to easily convertible currencies which eliminates a number of potentially attractive opportunities, in Asian emerging markets, for instance. I am not interested in currency funds for the reasons you mentioned.

With currencies, I always feel that the trend is much more important than the interest rate, although these two factors can be connected for a while. Even if one could find a deposit rate of 5% per annum or more, which would be extremely attractive today, the forex markets can move by that percentage or more in the short term.

Sterling is my base currency and remains unloved, much battered and heavily shorted. I have been holding sterling, somewhat uneasily, since taking profits on my NZD long following its dive to NZ$2.2 in Q4 2009. I have not switched to another easily convertible currency, although this would have gained some additional profit, because sterling remains near its historic lows against so many currencies. I am hoping for a General Election bounce in the next few months. If so, I will reconsider my options.