More than $3 Trillion Waiting on the Sidelines to buy stocks
Published: October 22, 2009 According to some estimates, investors have parked more than $3,000,000,000,000.00 - that's three trillion dollars - in money market funds waiting for the markets to calm down before jumping back into the game. Of course, some make the argument that if things return to normal, that tremendous liquidity would come roaring back in, making a faster recovery possible. Still, by recent standards, that amount is staggering and local investment adviser Todd Stoner said that "big round number" might entice investors off the sidelines and back into the market end of this year. Investors have long been bracing for a significant pullback. But any retreats in stocks have been modest -- less than 10 percent -- and brief. The market continues to feed on its own momentum. "I think what's happened is you had all these people sitting on the sidelines waiting for the correction to come," said Peter Schwartz, principal at Gregory J. Schwartz & Co. "But as time goes by and we haven't had any major pullbacks, these people sitting on the sidelines are finally pulling the trigger, saying, 'I can't wait any longer.' " According to The Institute's Board of Governors sets Institute policies and oversees ICI activities As this link shows : http://www.ici.org/research/stats/mmf/mm_09_24_09 There is about $3.5 to 4 Trillion sitting in money market funds collecting less than 1% in interest. This is as of a month ago. People are just scared and do the opposite of what they are supposed to do, which is to buy when stocks fall. Instead of loading up in the last few months on equities, which were selling at generational low price ratios, investors instead piled into bonds, CDs and Gold
