Market analysts and stock market talking heads have been saying every year for the last 10 years that a huge amount of money is sitting on the sidelines and it is close to be invested. Their claim was that it was going to be put to use at anytime and it would fuel a major market rally. Obviously, they were not right, at least not completely. Well, in 2011, I believe the talking heads could finally be proven correct in the next few years.
Obviously, the real fuel for the next big bull market will come from the deployment of all of this cash. It will come from investors and from companies. Investors and corporate executives need to get over their fears and feelings of uncertainty on the economy’s future, and they will start to spend. The recent Eurozoneproblems have only added to the fear. But those problems will be backstopped soon and we can move on. The reinvestment won’t happen overnight and many investors and companies will take their time and will scale in slowly but it will happen. The investors and companies that wait too long or that doubt every market rally will miss the next big bull run.
The amount of money sitting on the sidelines with investors and on corporate books right now is truly massive. Once corporations start using that money again for future growth and expansion, mergers and acquisitions, and for rehiring employees, the markets will respond positively and quickly.
And, more importantly, once individual investors realize that the worst is over and that the economy is really recovering for a sustainable period of time, their cash infusion will cause the markets to really take off. The start for putting this cash back to work for corporations and investors may be sooner than you think. The best time to get in as a long term investor is before that happens in order to catch the ride.
I believe that 2011 and 2012 will be a very good time to start putting investment money back to work in the stock market. The best time to invest is during times of high anxiety and fear. This could be the start of another bull market run after basically 10 previous years of a flat performance. You will not make any money putting it into cash investments or treasuries because they will return close to 0%. Equities are the place to be and high-qualitystocks would be a great start. Don’t miss out on this huge market moving event that should include your own money.
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