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To answer your question, you have to first ask, what are these funds for? The rational answer would be to invest and earn profits. What if it doesn't earn profits?
Funds which are earmarked excess, can have be invested in higher risks investments to gain higher returns. However, funds which are budgeted for immediate use, should be invested in lower risk instruments.
For example, monthly operational funds should not be invested in high risk products such as stocks and shares. These funds can be invested into monthly time deposits which can be withdrawn upon a monthly basis. Funds which are earmarked for future business growth can be invested in slightly riskier products such as bonds which yeld a good rate of return.
Everyone aims to build assets through funds they have. I would classify assets into good assets and bad assets. Good assets are those which provide you a return greater than the rate of inflation and also appreciates in its value. It puts money into your pocket and helps you become richer. Bad assets are those which provide you a return less than the rate of inflation and may not appreciate in value.
To answer your question, I classify the former as a bad asset and the latter as a good asset. Hope this helps you.
It actually depends on my future goals and needs. It can be short term or long term. For short term goals, you can just keep it in the bank under fixed income, savings or TD or conservative UITFs/MFs so that there will be no risk or minimal risk exposure. For long term goals, depends on the risk appetite. One can go into stocks or long term bonds. However you mentioned profit which means your investing into business that earns profit. Getting into that type of investments means that you are an aggressive person and willing to take high risk. It is always best to have your own business for long term goals. just make sure you have contingencies in case something goes wrong.
I can build a portfolio based on diverscfication the allocation of the assets accroding to the investment profit yield and its risk.
If you keep an available funds with an Islamic bank there is no such choice as an Islamic bank doesn't pay an interest but share any profit from investments made with you. Such a simple but highly productive way of money management.
It depends on the Risk tolerance of the clients accompiend by his target returns.
