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Big Cash, Little Impact

Matthew Allgood |

 

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Investors often describe cash/money market assets as 'dry powder' — resources on the sidelines ready to boost the equity market. However, while the notional dollars in cash are higher than before, it doesn't have as much power over the stock market. As a percentage of the S&P 500 market cap, the amount of cash is quite small.

 

It's important to know that this kind of cash won’t drastically change market trends on its own. We remain committed to strategically managing the risk exposures within your portfolios. By staying informed of these broader economic indicators, we ensure that your investment strategy is aligned with both current market conditions and your long-term financial goals.

 

Big Cash, Little Impact

 

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Source: Bloomberg, Redwood. Data as of 8/28/2024. Date Range from 1/1/2007 - 8/21/2024.​

 

 

Regards,

Allgood Financial

Disclosure: This piece is for informational purposes only and contains opinions of Redwood that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. The objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above. 

 

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