”As we move through a period of extreme uncertainty in Washington D.C., it is no surprise that the markets are showing signs of anxiety. The political chaos, coupled with shifting fiscal policies, is causing volatility across many sectors. Even the slightest shift in sentiment seems to shake investor confidence and cause tremors in the market. Yet, amid all this uncertainty, one thing remains clear: investors are flocking to the safety of cash. Part of the answer lies in the extraordinary rally we have witnessed in the equity market over the past year and the continued strength in the credit markets (corporate debt). Investors appear to be favoring cash: safe, liquid assets, and taking a few “chips off the table.” I’m often asked, “When will the money start to flow out of cash?” It seems unlikely that we will see that shift anytime soon – not until we witness a major sell-off and/or a recession will we likely see a significant drawdown in cash.”
Morten W. Langer
