By: Gerald Sparrow President & Founder, Sparrow Capital Management, Inc.
Market timing must be exhausting. Always moving in and out of the markets based on economic analysis or business headlines must be so challenging.
The accompanying chart shows that money held in money market mutual funds rose to $5.1 trillion in March 2023.
Investors tend to pull money from the financial markets and retreat to money market funds during periods of uncertainty. While there may be some macroeconomic reasons (inflation, interest rates) for the most recent move, the headline about the banking sector’s troubles likely influenced the March increase.
With investing, it’s critical to “tune out the noise” and focus on what you can control, like your time horizon, risk tolerance, and goals.
Because I can promise you one thing: there will be several more headlines in 2023 that will cause stock prices to react. Market timers will be busy.
PHOTO CREDIT: https://www.shutterstock.com/g/ladik
Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.