People still not investing in the US market while stocks reach their highest records


March 1, 2024

While the US stock market is nearly at its highest ever, investors do not seem to care.

The S&P 500 (SPX), which is used to measure the US stock market, has climbed more than 4.5% this year, and almost reached its highest ever on Wednesday 12 February. But investors remain very cautious, mostly because of political uncertainty, geopolitical risks and the Coronavirus outbreak, which is still very uncertain in terms of economic consequences.

“Money market fund levels are still just at levels of 2009, even though they spiked all of last year,” said Brent Schutte, chief investment strategist at Northwestern Mutual.

Fund assets have now reached $3.6 trillion, which is the highest level in more than 10 years, although not quite as high as the $3.9 trillion reached in January 2009.

Since the financial crisis and recession, investors are very cautious even if the US market is an ideal investment thanks to its strong economy and low inflation.

According to experts, it is time for investors to stop worrying and to follow everyone else. “There’s still a lot of cash on the sidelines, which is why I think markets could still move higher,” Schutte said.

And although the US-China trade war is also a worry preventing people from investing, the fact that the two countries have agreed on a ‘phase one’ trade deal has helped lifting the stocks and clearing some uncertainties by quite a lot.

“Being out of the market at the moment is one of the biggest mistakes you can make,” said Matt McCall, founder and president of Penn Financial Group.