ONLY THE CENTRAL BANKS ARE NOW LEFT TO BUY
Negative free cash balances are screaming about the risk from investors having piled on the highest levels of leverage in market history.
Additionally, a look at the stock-to-cash ratios suggests there is very little available current buying power available from investors.
Each month, the Investment Company Institute releases information related to the mutual fund industry. Included in this data is the total amount of assets invested in mutual funds, ETFs and money market funds. As a rough measure of investor sentiment, this indicator looks at the total assets invested in equity mutual funds and ETFs, and compares it to the total assets invested in the safety of money market funds.
The higher the ratio, the more comfortable investors have become holding stocks; the lower the ratio, the more uncertainty there is in the market. Currently, with the ratio at the highest level on record there is little fear of holding stocks.
Furthermore, with investors once again “fully invested” in equities, it is not surprising to see cash and bond allocations near historic lows.