CASH HITS RECORD HIGH

Did you know that cash on the sidelines has hit a recored $5.6T?

So what does this mean for you as an investor? In the last couple of years cash-like investments have been on the rise for a few reasons: 1. Yields have been much higher than they’ve been in a while giving investors an opportunity to find attractive investments in this market environment. Money markets & high yield savings accounts have been paying upwards of 5%. 1. Investors have flooded to cash is the uncertainty & volatility in the market, with cash giving them a place of solace & comfort. Why not take the higher yield when you're also unsure of where this economy & market is going? The problem becomes when do you put that cash back to work in the market & how? In the 3 months following the S&P 500 low of the financial crisis (which was right after the cash peak) the market had a return of 40%. In the 6 months following the low it had a return of 55%. In the 3 months following the S&P 500 low during the pandemic (which coincided with the cash peak) the market had a return of 41%. In the 6 months following the low it had a return of 46%. Over the last four rate hike cycles, yields on cash have decayed very quickly in the 18 months following the last rate hike! Not the rate cut. A lot of investors want to wait until the rate cut to start allocating cash back into their investments but if you look at past markets, they would miss a lot of the returns to do so. While cash has been a nice investment in the last year, it might be time to consider your long term goals & risk tolerance and rebalance that cash back into other investments while we are nearing the end of rate hikes. If you want more info on this topic - check out my market update video on this topic here.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Past performance is no guarantee of future results.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

This material was prepared by LPL Financial, LLC.