Sunday, April 26, 2009

Money market fund assets as a percentage of the SP 500 market cap


This chart makes for an interesting reading:

1) over the last 30 years, the yield on the US Treasury Bills has never been so low (0.38% as of April 4, 2009) while the amount of cash invested in money market funds has never been so high (54% as a percentage of the SP 500 market capitalization).

2) when a big amount of that money that is currently on the sidelines will be again invested in equities, the stock market could rise a lot like it did back in 2003.

So you'd better be prepared! ;-)

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