A survey of wealthy investors shows almost 90% think there are ways to make money in the current market, but more than two-thirds said the risks are still too high, which means there's plenty of money still sitting on the sidelines.
When we say sitting on the sidelines, that does not mean it is dollars stuffed under the mattress. My concerns is that most cash is actually sitting in T-Bills and if investors move out, the price drop will strangle a recovery. Maybe, it's not just the Chinese that are stuck with their Treasury holdings, maybe we all are....
In addition to T-bills, I suspect a lot of that cash is in bank CDs. Some banks have offered attractive rates to pull in the deposits. When the CDs get redeemed so investors can go back into stocks, what happens to their capital ratios?
This news story has 3 comments: