Notes from Nagle - September 28, 2024

Why Does This Matter?
Well, let’s put it in perspective. There’s over $7 trillion currently parked in Money Market funds. Yes, trillion—with a "T." That’s a mountain of cash just waiting to move. Now, obviously, not all of it will budge. People still need some "rainy day" money (you know, for when your roof starts leaking). But $7 trillion? That’s a lot of "just in case" cash!
 
Where Will This Money Go?
Some of that cash is bound to head toward higher-yielding investments—bonds and high dividend-paying stocks. It’s like trading in a Camry for a Range Rover. You’re still going to get from point A to B, but now you’re doing it for real. Utilities are a great example here: solid companies paying steady dividends, like the dependable but slightly boring cousin of the stock world.
 
And let’s not forget bonds. If you grabbed high-quality bonds before rates started falling, you're living the dream with higher interest payments and price appreciation. It’s like you bought a house before the market went crazy—now, not only are you sitting pretty, but you can tell all your friends how smart you are.
 
But here's the interesting part—I think a big chunk of this money is going to head straight for growth stocks. Tech stocks, industrials, consumer goods. It’s like the money is saying, "Hey, I’ve had my sensible phase, now let’s get really serious!"
 
What Does This Mean for Markets?
For the stock and bond markets, it means there’s going to be a flood of cash rolling in over the next year or two. Think of it like the tide coming in—good for the beach, good for returns, and definitely good for those of us who like to sit back and watch our portfolios grow.
 
Of course, let’s not get too carried away. Life has a way of throwing in surprises—those lovely "Black Swan" events (thanks for nothing, 2008!). So, maybe don’t throw all your money into the mix. There are still plenty of conservative options that won’t keep you up at night.
 
But if you’re smart, thoughtful, and maybe just a little lucky, this shift could be a golden opportunity.
 
Got financial questions? Send them to Peter J. Nagle at [email protected].