- Cash levels in the U.S. are extraordinarily high right now.
- Just focus on the 'cash' buildup and where it is likely to go next.
- Interest on cash deposits: CDs, money market, etc. does not even keep up with inflation.
- You, quite possibly, could miss the next big run for U.S. stocks as that cash gets invested.
- This unprecedented level of dry powder can help absorb the inevitable shocks to stocks, potentially providing downside protection.
2018 Update: Real-time 'cash' as % of GDP -- St. Louis Fed's M2/GDP.
Spoiler Alert: it's just as high still in 2018!
The dry powder/sideline cash is still there, unlike previous market-peaks.