Record Amounts of Cash Sidelined in Post-COVID Market

From the desk of Matt Mondoux, CFA, CMT, CFP®

Today’s Wall Street Journal highlights the scope of today’s market's “pain trade” (i.e. the most painful outcome for investors). Assets in money-market funds have increased nearly $1 trillion in 2020 and are surpassing all-time highs – approaching $5 trillion. That statistic is made even more shocking by the fact that all of that cash is not even keeping up with inflation due to interest rates hovering mere basis points above 0.0%! Future market dips may be short-lived and shallow as cash gets deployed.