tag:blogger.com,1999:blog-36722043.post3359795324282248013..comments2023-06-08T06:59:14.045-04:00Comments on HORAN Capital Advisors Blog: Where Will Investors Invest Their Cash?David Templeton, CFAhttp://www.blogger.com/profile/08782216535717865701noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-36722043.post-34177585373480533902009-07-18T22:55:14.154-04:002009-07-18T22:55:14.154-04:00According to the Investment Company Institute, ass...According to the Investment Company Institute, assets in money market funds total $3.647 trillion as of July 15, 2009.<br /><br /><a href="http://www.ici.org/research/stats/mmf/mm_07_16_09" rel="nofollow">Money Market Mutual Fund Assets</a><br /><br />The full cap total market value for the Wilshire 5000 Index equals $10.79 trillion as of June 30, 2009 according to <a href="http://www.wilshire.com/Indexes/Broad/Wilshire5000/Characteristics.html" rel="nofollow">Wilshire Associates</a><br /><br />This provides a cash percentage of about 34%. This may include cash at the Fed but, if so, that particular cash would be controlled by investors and not the bank per se.<br /><br />As a result,I believe there remains sufficiently high cash levels that could provide support for equities assuming the cash is used by investors to increase their equity allocation.David Templeton, CFAhttps://www.blogger.com/profile/08782216535717865701noreply@blogger.comtag:blogger.com,1999:blog-36722043.post-66548822915381749862009-07-18T22:12:36.742-04:002009-07-18T22:12:36.742-04:00Much of the institutional cash is parked with the ...Much of the institutional cash is parked with the Fed since the Fed is now paying interest on excess reserves. Reserve balances held with FRB has gone from 0 to 800 billion this year.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36722043.post-56027066782862282662009-07-18T17:40:56.062-04:002009-07-18T17:40:56.062-04:00This is a loaded question and my answer is worth w...This is a loaded question and my answer is worth what you are paying. :) Nonetheless, historically, the sectors that lead early in an economic recovery are materials, technology and consumer discretionary. As fate would have it, these are the best performing sectors in the S&P 500 on a year to date basis. The stock market does tend to lead the economic cycle.<br /><br /><a href="http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,0,0,0,0,0,0,0.html" rel="nofollow">Sector Performance</a><br /><br />A chart showing the rotation of the sectors during the economic cycle can be found below:<br /><br /><a href="http://www.financialsense.com/fsu/editorials/wagner/2009/images/0416_clip_image001.jpg" rel="nofollow">Sector Rotation</a><br /><br />Lastly, what is important during this cycle is to have some feel around the type of growth the economy will achieve. Is a large part of the growth going to be driven by non U.S. growth in foreign markets? If so, one might want to tilt their U.S. portfolio toward multinational companies. Additionally, if growth is going to be slower due to slow GDP growth, companies that are consistent earnings growers will likely out perform versus say high beta stocks. That opposite will be true if the economic growth is red hot. High beta stocks will then outperform.David Templeton, CFAhttps://www.blogger.com/profile/08782216535717865701noreply@blogger.comtag:blogger.com,1999:blog-36722043.post-62794619677149302072009-07-18T16:53:08.253-04:002009-07-18T16:53:08.253-04:00Hi David,
Within the S&P 500 Index, which sec...Hi David,<br /><br />Within the S&P 500 Index, which sectors typically out performs the market during a recovery?狂猪https://www.blogger.com/profile/16599529315620633684noreply@blogger.com