In September 2025, the U.S. faces a swirl of economic uncertainty. JPMorgan’s Jamie Dimon recently warned that the economy is weakening, with the Bureau of Labor Statistics revising 911,000 jobs downward from earlier projections—casting doubt on labor market resilience. Wholesale inflation is easing—a bright spot—thanks to weaker pressures across goods and services. Markets are responding: the S&P 500 and Nasdaq are nearing record highs, fueled by optimism around AI-driven growth and whispers of imminent Fed rate cuts.

Yet beneath the surface, alarms are sounding. Price pressures remain, and uncertainty around tariffs and policy remains unresolved. Against this backdrop, it’s worth asking: when volatility and economic risk are baked into the system, what's the safest asset? For many, the answer is clear: cash reigns supreme. It preserves value, offers flexibility, and may very well be your strongest ally in a besieged economy.

A Historical Look at Economic Downturns

Today’s market turbulence isn’t unprecedented. Over the last 130 years, America has experienced five major stock market “crashes,” with some being more devastating than others.

Although these events were tragic and had long-lasting affects across economic spectrums, it’s important to note that the American financial system grew stronger for weathering these storms. For example: The Copper Panic of 1907 lead to the creation of the Federal Reserve, while the “Black Monday” crash of 1987 resulted in the markets installing “circuit breakers,” which would temporarily pause trading to prevent panic selling of certain securities.

More importantly, (and despite the headlines of the day), the economy continued to recover after each major downturn. The key difference between them is in how long it took before we saw an upward trajectory, and the role technology played into it. After the Great Depression, the American economy didn’t see a full turnaround until 1941, when the country entered World War II. After the 2007-2008 economic crisis, investors started seeing gains once again 17 months after the crash. And in the most recent event, the major indexes caught up to their pre-crash high marks between May and November 2020, leaving investors down for only six months.

Why Cash is Key in Down Markets

If the past has taught us anything, it’s that we never know where the true “bottom” is in an economic downturn. Moreover, it’s impossible to predict when some stock may “bottom out.” In these situations, your most valuable asset may not necessarily be a market-tracking ETF or the “once in a lifetime buy” you saw on social media, but it may be your personal cash holdings, instead.

As we’ve noted before, not even the best analysts can predict where the market will go and ultimately “beat the market.” This means investing in a down market is a gamble: While it could result in gains, it could also result in more losses before actualizing an increase. Holding cash preserves your current wealth without exposing it to unnecessary risk due to volatility.

Cash remains king in a down market because it can hold its value better than securities and hard assets, even in an inflationary period. It’s important to understand that inflation is personal to everyone, depending on their personal lifestyle and expenses. For example: Someone who drives to the office every day will find they are more affected by increased gas prices than someone who works from home. In another situation, a family of four will feel the pressure from grocery price hikes and supply chain disruptions than someone who lives alone. Holding more cash than usual allows individuals to scale their spending with changes in price, giving them more flexibility in their everyday budget while balancing spending and savings.

How Much Cash Should I Hold?

Now that we have established why cash remains a strong holding in an economic downturn, the question becomes: How much cash should you hold? The answer is different for everyone, based on their own personal economic situation.

At minimum, everyone should have between three and six months of savings available in the event of an emergency. These funds should not be used for anything else but a crisis, such as a job loss, major expense (like an appliance breaking, major car repair, or emergency medical bill), or other serious event. Your savings should be proportional to your spending: If you spend a high amount each month, you should be prepared to save more to cover that spending.

After one has an adequate amount in savings, the next thing to consider is your risk tolerance for your money. The smartest way to think about investing is considering a liabilities-driven investment plan. Under this strategy, individuals and families take a look at their current and future liabilities, and invest only what they can afford to risk. Using a liabilities-driven look, anyone can take advantage of the current environment without risking their financial lives.

If you decide to invest, it’s important to understand that downturns in investment markets offer a reshuffling of resources: While some of the top companies will drop in value as they re-tool for the next cycle, others will spring ahead based on their resources and demand. The key is understanding which companies are aligned with the future, which ones are aligned with your needs, and a willingness to hold on even when things get down.

Although things may look bad now, this isn’t the last downturn we will see in our lifetimes, and it only gets truly dangerous if we aren’t prepared for it. When the economy gets difficult, cash can be peace of mind, and a solution to what everything in life is priced in. By holding enough money to weather the storm, anyone can set themselves up to thrive in the future.

Unifimoney’s investment-as-a-service (IaaS) tools can help your customers automate their savings and setup a liabilities-driven investment plan with the smartest robo-advising tools available. Talk to us today about how we can drive customers to your institution with trust, and keep them invested in your overall solutions.