In the lead up to the Fed meeting this week there have been many differing opinions on whether or not the market will continue to perform well. Two of the more bullish opinions have come out of Goldman Sachs and Laszlo Birinyi (a legendary investor.)
As Goldman Sachs pointed out in a recent research note, the current cash position of 3.2% for mutual funds is “normal,” showing that “skepticism abounds.” In other words, the stock market lacks the type of overexuberant sentiment that can leave it vulnerable.
In an interview with Business Insider, Birinyi endorsed a similar view:
“I don’t think people appreciate how much cash there is in today’s market. It seems like everything is just an excuse to put that cash to work, whether it’s a tax bill or economics or [President Donald Trump’s chief economic adviser Gary] Cohn not leaving the White House — those are all just excuses. The bond market is unsettled, and you’ve removed some of the stock market concerns of the last couple years, most notably earnings. People are feeling a little more confident and willing to invest, and they have the cash to do it.
Birinyi has been one of the few investors that has been right about the bull market that has existed for the past eight years. Investors should take his words seriously and learn from what he has to say to improve their own outlook on the current market. If you want to read the full interview, go over to businessinsider.com.
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