According to a recent article in Bloomberg, investor cash levels have jumped toward levels not seen since 9/11.
For a variety of reasons, money managers have pushed cash levels in portfolios they manage to extremely high levels. The only time cash levels have been higher was after the September 11th attacks on our country. Regardless of the reason, the article explains that according to some, this negative sentiment could be construed as a buy signal. The idea is that when most investors are sitting on the sidelines, the smart investor is a buyer. When most are scared, that is the time to start looking for good investments. The other side of that argument is to lighten up your holdings when most people are happy and feeling very smart about the market taking their investments up in value. We have noticed a marked increase in the number of our clients that are concerned about this election’s impact on their portfolios. We think that if our clients feel this way, then there are many more that feel the same way across the country, and are a bit jittery. It appears that fund managers feel the same way, and have opted out of the market, and are sitting on cash.
We would love to talk with you about how to use information like this when considering investment options. Contact us today to learn more.