Wall Street Predicts Influx of Cash into Stock Market

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Finance News

Wall Street,Stock Market,Cash

Households and nonprofits hold $4.4 trillion in checking accounts and cash alone

Wall Street is once again pushing the feel-good theory that there is a giant wave of money just waiting to come into the stock market and drive stock prices higher.

There is a superficial, glib appeal to the idea. After all, lots of people hold money on deposit at the bank, and they could use that money to buy stocks, right? To put it simply: Every time a stock is bought, one must be sold. If someone with $10,000 in the bank turns bullish on stocks and decides to invest that money in the stock market, they can only make an investment by finding existing shareholders who are willing to sell their shares in return for $10,000. The money and the stock change hands, sure. But that’s all.

If Wall Street types really want to make the case for being bullish, they’ve got stronger arguments to hand. One is that we’ve just started the six-month season when stocks typically make all the money.

 

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