America Is Addicted to Cash, Even as the Stock Market Rallies

In America, there are 6 trillion reasons that the investors are loving cash right now and this also indicates that this romance could be an unhealthy habit.

According to the reports released by the Investment Company Institute, citizens of America are investing into super-safe investment funds which guarantee them with return of 5% or 6% benefit. They are avoiding taking risk in buying stocks and bonds and are holding near-record of $5.9 trillion in those super-safe market.To being sold by banks and asset managers like Fidelity Investments and Blackrock, the lucrative yields are being increased by the Federal Reserve’s interest rate hikes that got started in March 2022, a bid to stifle inflation by making it more expensive to borrow money.

We can say that money market funds are the best option to invest right now but it can be worst if you become too infatuated with them and keep your dollars there.

Since about 1800, stocks have returned an average of 6.5% to 7% after accounting for the impact of inflation on the purchasing power of those profits, with Wall Street’s returns so far this century within that range, consulting firm McKinsey says. That’s before taxes take a further bite out of the gains.

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