Dividends and Some investors seek cash amid inflation

When the stock market goes up everyone wants to have money in the stock market, when the market goes down, what to do? Values have declined are they better to buy now or hold cash? Cash does not go down, but if inflation is running well above interest rates from banks, what should you do?

In an article by Lewis Krauskopf of Reuters, that’s made cash more attractive hideout for investors seeking shelter from market gyrations.

Fund managers increased their cash balances to 6.1% in September, the highest level in more that 2 decades a survey from BofA Global Research showed.

Assets in money market funds are $4.44 trillion not far from their peak of $4.67 trillion in May of 2020 according to Refinitiv Lipper.

Paul Note of Kingsview Investment Management said the portfolios he manages has 10 to 15% cash as opposed to the normal less than 5%.

The Crane 100 Money Fund Index, an average of the 100 largest taxable money market funds has an average yield of 2.8% up from 0.02% at the start of the year and the highest level since June 2019.

Linking to dividend paying stocks, as individual investors often you wonder if you had institutional type money what would you be doing? It turns out the same as individual. As an individual you can have a long-term holding as your total return of capital appreciation and dividends helps makes you wealthy.

There are more questions than answers, till the next time – to raising questions.

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