Do any of you have a sense of where people are putting money from stocks?

[Guest]

My brother is kind of a finance guy, so I asked him where all of these people who are taking their money out of the stock market are putting their money. Obviously, with high inflation, one doesn't want it in low-interest bonds or CD's. His convoluted answer seemed to be that people are taking out money from the stock market because they can't afford the high interest rates--in other words, they're using the money they withdraw to repay loans they can no longer afford. I'd guess that's part of it, but there must be panicky people putting it in other places. Any of you know where? Is it commodities? Foreign markets? (I don't have money in the market I planned on withdrawing over the next 10 years, so I'm not selling anything myself)

[+ Vegas_Millennial]

Bank deposits are at an all time high, even with close to zero interest rates.

[Guest]

On 5/11/2022 at 10:31 AM, Vegas_nw1982 said:

Bank deposits are at an all time high, even with close to zero interest rates.

Yikes! That's nuts! I guess people who don't understand the basic principle that one should never try to time to market, but to put money in the market if one has the right time horizon. One of my financial advisors suggested some of those people are putting the money into annuities (he did not try to sell me any, BTW). Not that one should ever try to time the market, but what a great time to buy, it would seem, especially with such a high rate of inflation...

[Guest]

There’s $3Trillion in excess liquidity in bank deposits right now.   If the Fed stops reinvesting maturities and takes $95Bill/mo out of the system, in a year, there will still be about $2Trillion in excess liquidity.   This is why we have inflation lingering longer than expected.

I have a completely unsupported hypothesis - folks were using easy credit and doing credit card advances to float “investment” in crypto.  Now rates are rising and crypto is falling hard and there’s a defacto margin call occurring.

I remain a crypto virgin…and plan on staying that way.  

[Quincy_7]

I'm personally stockpiling cash because I want to buy a house in 2 years but I will also put the money into the stock market for some easy gains if we have a recession and the market keeps tanking.

[+ Coolwave35]

I’ve moved money from the stock market to some syndicated real estate deals. It’s nice to continue building wealth through real estate without having to manage it. 

[handiacefailure]

Ibonds is a good place if you don't need it for one year for a good return with no risk.   Only problem is that you are limited to $10K a year (can do another $10K if you ahve a trust and another $5K if you have a tax refund that high and get paper bonds with it)

Edited May 13, 2022 by handiacefailure

[Guest]

On 5/13/2022 at 7:11 AM, Coolwave35 said:

I’ve moved money from the stock market to some syndicated real estate deals. It’s nice to continue building wealth through real estate without having to manage it. 

Beware exit cap rates.  Make sure you’re buying cash flow and not expectation of gains on a 3-5 yr reversion. 

[Rudynate]

On 5/12/2022 at 5:25 PM, Unicorn said:

Yikes! That's nuts! I guess people who don't understand the basic principle that one should never try to time to market, but to put money in the market if one has the right time horizon. One of my financial advisors suggested some of those people are putting the money into annuities (he did not try to sell me any, BTW). Not that one should ever try to time the market, but what a great time to buy, it would seem, especially with such a high rate of inflation...

Maybe they remember the early 80's when CDs were paying 11 - 12% and the prime rate was 22%.  I wouldn't be surprised if we got there before long.

[Kevin Slater]

Cash.

https://www.marketwatch.com/story/is-it-now-or-never-for-a-stock-rally-fund-managers-cash-pile-is-the-biggest-since-2001-says-bank-of-america-11652795511?siteid=yhoof2

Kevin Slater

[RadioRob]

While others may be pulling out of stocks, I'm actually upping what I'm putting in the market.  Might as well pickup a few bargains.  It may take a little bit, but I'm not looking at needing it for  quite a while.  

[Guest]

55 minutes ago, RadioRob said:

While others may be pulling out of stocks, I'm actually upping what I'm putting in the market.  Might as well pickup a few bargains.  It may take a little bit, but I'm not looking at needing it for  quite a while.  

Smart man.