Cash is king again.
When near-term returns for the S&P 500 look bleak and interest rates push yields from savings accounts up to an eye-popping 5%, some investors are asking themselves if they should ditch the erratic equities market altogether for its reliable, if not boring, cousin: cash. Cash is a “compelling alternative to the S&P 500,” Bank of America analysts wrote in a research note to clients, predicting disappointing near-term returns for the S&P 500. According to a recent Allianz research report, 62% of Americans surveyed said they would rather keep their money in cash than weather the market storm. Recent bank failures have also caused investors to move their money to more conservative, low-risk accounts and funds. In the first quarter of 2023 alone, investors moved $508 billion into money market funds, a high-yielding place to store cash, according to Bank of America's most recent global research report.
