Americans will dump up to $1.1 trillion in stocks this year, and move the cash to credit and money-market funds, says Goldman.

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Rising bond yields are making equities less attractive for investors, which is bound to end up in billions of those assets being sold this year, estimates...

That’s according to Goldman Sachs analysts who say due to the rise in bond yields since the start of 2022, and increased flows to bond and money-market funds, U.S. households could end up dumping up to $1.1 trillion of equity holdings this year.

“The current level of market yields clearly shows that the era of TINA has ended and that now there are reasonable alternatives to equities,” said a team of strategists led by Cormac Conners and David Kostin. In their base case, they estimate net selling of $750 billion this year, alongside their forecast for the yield on the 10-year Treasury note TMUBMUSD10Y to rise from around 3.6% currently to 4.2% by the end of this year, and the personal savings rate will rise to 5.3% from 4.5%. Conners and the team said such stock selling would reverse six previous quarters of household equity demand.

As for the idea that there are now reasonable alternatives to equities , Goldman said households tend to buy fixed income products during years in which they sell stocks. They pointed to data showing $51 billion has flowed out of U.S. equity mutual funds and exchange-traded funds, year to date, while $282 billion has poured into U.S. money-market funds and $137 billion into U.S. bond funds.Picking up some of the slack left by U.S.

 

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Well that would be idiotic unless you’re 65 +

Or they can switch that 1.1T strait into BTC and we got back to lovely 50k per BTC.

The last time Americans loaded up on money market funds was '06 and '07 right before they became worthless in '08. So why is this a good decision now?

Please can someone explain this in the simplest form? Thank you

Money market gives low rate.. why do they want to do?

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