Investors are holding near-record levels of cash

Investors are holding near-record levels of cash, per CNBC.

A record amount of funds flowed into money market accounts as the year ended. in 2022.

The Investment Company Institute said money market accounts held a record $4.814 trillion in the week ended Jan. 4.

“It’s a mountain of money!” wrote Bank of America technical research strategist Stephen Suttmeier. “While this seems contrarian bullish, higher interest rates have made holding cash more attractive.”

“Cash is no longer trash. It’s paying a reasonable interest and so it makes the hurdle higher over which the risky assets have to jump to generate an additional return,” Cresset Capital’s Jack Ablin has said.

“If you look at the flow data for the middle of December, liquidations were on the order of March 2020,” Julian Emanuel said. “In the short-term, it was a very contrarian buy signal. To me this was people basically selling the market at the end of the year, and they just parked it in the money market funds. If the selling continues, they’ll park more.”