The Wall Street Journal: Can cash come off the sidelines and boost stocks?

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As stocks cruise to fresh highs, investors’ $3.4 trillion pile of cash is reassuring some that the decade long bull market can push still higher.

Assets in money-market funds have grown by $1 trillion over the last three years to their highest level in around a decade, according to Lipper data. A variety of factors are fueling the flows, from higher money-market rates to concerns over the health of the 10-year economic expansion and an aging bull market.

Yet some analysts say the heap of cash shows that investors haven’t grown excessively exuberant despite markets’ double-digit gains this year, and have plenty of money available to buy when lower prices prevail. That is a comforting message to those concerned about an economic slowdown yet wary of betting against a market that has punished doubters during its 10-year run.

“Cash always makes me feel good, both having it and seeing it on the sidelines,” said Michael Farr, president of the money-management firm Farr, Miller & Washington, which is holding twice as much cash as usual. “It keeps things a little bit safer.”

A copy of this report appears at

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