I rejoined our neighborhood investment club this past Friday morning. It was a crisp 55-degrees here in Celebration FL, so we met inside the neighborhood clubhouse. There are quite a few Snowbirds in the group like myself who haven’t seen the other guys since last April.

Rather than talk about how well 2025 turned out for most investments, the conversation was forward looking. We were all wary of the relatively high current multiple of the S&P 500 and many of us were sitting on some cash that we were unwilling to put into the market at such at such a lofty price. The Shiller PE ratio is almost as high now as it was during the dot.com boom …

One of the club’s members noted that many people were doing what we were doing – holding extra cash – and that it represents OPPORTUNITY for the market, that could offset the risk. Money Market funds in the USA are holding a record ~$7.8 trillion in cash on the sidelines. I’m not sure what the “right” amount of money to be held in money markets is, but the balance has grown faster than the stock market overall, which is pretty impressive.

The Federal Reserve tracks the $ in Money Market Funds …

If half of that $7.8T was put into the stock market tomorrow, that would be about +6% growth for the stock market. In addition, he noted that there is significant cash in other savings vehicles (pensions & 401Ks, for instance). Perhaps all investors need to see is a strong round of corporate earnings, a further drop in interest rates, or continued good GDP growth to put their “dry powder” into the market.

We are in that situation ourselves. We have extra cash right now from the sale of our rental townhouse last year, but kept much of it out of the market. We are utilizing CDs and a “premium” money market fund that are all paying a bit short of 3.75-4.00% right now.

Do you have money “ready” to go into the market? What would cause you to push it into play?

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