More than $3 Trillion Waiting on the Sidelines to buy

More than $3 Trillion Waiting on the Sidelines to buy


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.' "



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