Fearful Investors Are Making a Big Mistake Today

Investors are hoarding cash. But according to the data, they're making this move at the worst possible time... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] Editor's note: The stock market has pulled back this month. Investors are worried that 2022's declines will return with a vengeance. But according to Briton Hill from our corporate affiliate Chaikin Analytics, one measure shows just how irrational those fears have become. In this article – which was originally published in the free Chaikin PowerFeed e-letter – he explains the details... including why running for the exits might be a worse mistake than you think. --------------------------------------------------------------- Fearful Investors Are Making a Big Mistake Today By Briton Hill, editor, Chaikin PowerTrader --------------------------------------------------------------- Stocks have entered a new bull market... At the same time, the [American consumer is doing better]( than the mainstream media will ever tell you. Despite that, investors are looking for safety. They're holding more cash than ever. In fact... nearly $5.57 trillion is sitting on the sidelines right now. That's right. This isn't a squishy "it feels like folks are fearful" type of thing. Using one official indicator, we can see that investors are hoarding cash. They're still worried about what might come next. But all the data we have shows that they're making this move at the worst possible time... --------------------------------------------------------------- Recommended Links: [Prepare Now for the NEXT Wave of Bank Failures]( After soaring 40% this year, the Nasdaq is faltering. And with more bank failures on the horizon – plus the Federal Reserve's relentless push for higher rates – Wall Street veteran Marc Chaikin is ready to share a critical update with you. He called this bull market way back in January and predicted a "run on the banks" five months in advance. Now, he's preparing for one final twist before the end of this year. [Click here for the important update](. --------------------------------------------------------------- [VIP Tickets Are Officially Sold Out!]( The 2023 Stansberry Research Conference & Alliance Meeting VIP tickets are all gone, but you can still reserve a standard seat for our most popular event of the year. You don't want to miss the incredible presentations and free stock giveaways shared on stage. Plus, you'll get the chance to meet and mingle with your favorite Stansberry editors. [Reserve your seat here while there are still tickets left](. --------------------------------------------------------------- Folks, if you don't know already, I'm talking about cash holdings in money market accounts. When an investor sells a stock, the cash usually goes into their money market account. And they can park the cash in the account as long as they want. The total value of money market accounts ebbs and flows over time. If the value is dropping, it tells us that mom-and-pop investors aren't worried. And when it's soaring, we know that these investors are fearful. They're choosing to sit on the sidelines. That's exactly what we're seeing today. Take a look... This is a quarterly chart. As of last week, though, the total value of money market accounts is close to $5.57 trillion. And perhaps more significant, the value of these accounts shot up a lot recently. This trend is important... You see, the value of money market accounts is what we call a "real-money indicator." It shows us what everyday investors are doing with their money at any given time. In other words, we can see how investors are feeling by looking at their actions. Now, we can expect the value of these money market accounts to gradually grow over time. After all, inflation pushes them higher as more and more money enters circulation. But in this case, the massive jump on the far-right side of the chart is noteworthy. You'll notice that the recent move is more extreme (steeper) than most of the past 40 years. We can also use additional data to confirm this shift... Specifically, we can look at U.S. equity-fund flows. This data shows that investors are undoubtedly fleeing stocks – even as the market rallies. For example, U.S. equity funds recently experienced nearly $15 billion in net outflows in the seven days leading up to August 9. It was the largest week of net outflows since late June. This is a particularly dangerous decision for individual investors. History shows us that many of the market's biggest moves higher happen during a recovery. That's exactly what we're seeing this year... The broad market has soared from its October 2022 lows. Even after this month's dip, the S&P 500 Index is still up around 23% since then. And Big Tech, the hardest-hit sector last year, has soared in 2023. And yet, the data show that investor fear is at an extreme level. People are waiting for the other shoe to drop. In doing that, they're ignoring the tremendous market opportunity right in front of their faces. Folks, I understand playing defense. But sitting on the sidelines is often a more dangerous financial decision than many folks realize. And a new group of investors is in the process of discovering that today. Where will they be when they realize they've missed the first year of a new bull market? Don't fall into that trap. Good investing, Briton Hill --------------------------------------------------------------- Editor's note: Volatility has returned to the bull market. But you can use it to your advantage. Marc Chaikin – founder of Chaikin Analytics – says one specific strategy is ideal for this market environment. Since his team first introduced it in March, the results have been astounding... with gains like 76% in four months, 75% in 40 days, and even 113% in just 26 days. This idea is designed to harness volatility for quick gains. And the setup today is so fantastic, Chaikin Analytics is reopening its "Charter Membership" to help you get started... But this offer won't last long. [Get the full details here](. Further Reading Investment professionals are finally getting back into stocks. When these folks turn bearish in droves, it's a strong sign that a bottom is near – but importantly, bullish sentiment like this doesn't mean a peak is right around the corner... [Learn more here](. Tech stocks and the S&P 500 were huge winners in the first half of the year. They left the "boring" Dow Jones Industrial Average in the dust. Then, last month, the Dow surged dramatically. Rallies like this are rare – and they typically point to more gains ahead... [Read more here](. --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You're receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [www.stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.