Well one of the interesting things could be house buying. A number of people during the dot com meltdown were buying houses and waiting to exercise their options at the last minute because they wanted the price to be as high as possible. Except that when it came time to buy their stock value had plummeted. Forcing them to either sell more than they intended, or abandon the house purchase, or restructure the purchase.

People with that experience might sell their assets, hold the money in their account until everything has settled, and then move forward.

Also folks who sell stock options often have big tax bills to pay. But rather than slosh that money into and out of something that pays .5% interest they are just leaving it in their account until sending it to the IRS on 4/15.

The bottom line is it is that the answers look different from two sides of the bank balance :-)

I don't think I have ever left that much money in my account for any length of time, but I do recall the CEO of a company I helped get started put the $1.5M series A check into their account while waiting to transfer it over to the newly established corporate accounts. He joked the bank staff treated him very well after that :-).

I have maybe $80k in cash savings. I feel w/ $900k in index funds, it's reasonable to keep ~10% in cash.

ps. I'm old.

Mine is liquid at the moment because I will be buying a house this year. I'd rather not lock it in to anything that makes it difficult to retrieve. This includes an RRSP mind you. That's liquid for house buying in Canada.

When we were renovating our house, we kept about an order of magnitude more liquid than usual. Writing checks for $O(15k) on a weekly basis will cause you to do that.

As someone who is averse to risk and wants 1-2 years of equivalent salary reserves, what are some other options?

They might be including their money in the stock market / mutual bonds / etc?