Financial media coverage of the explosion in the nation’s money supply, M2, is scant. With so much going on in the world, the parabolic rise in M2 has received little press, but it could be the most important investment trend of 2021.
M2 consists of currency held by the public, plus checking, savings and money market accounts.
M2 has skyrocketed because of the financial relief appropriated in the March 23, 2020 legislative response to the Covid crisis, and because Americans are staying home and saving at an astronomical rate since April 2020, when the relief payments first hit their accounts. It’s a cash hoard unprecedented in modern history!
Where will that cash go in 2021? With interest rates low and the Fed saying it is not planning to raise rates for the foreseeable future, bonds are not an attractive investment. Likely places for the cash to go are stocks and real estate.
If Americans deploy the glut of savings into stocks and real estate, are you in position to benefit? While it is impossible to time the market, it is possible to assure you do not miss out on the expected investment trends.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.
©2020 Advisor Products Inc. All Rights Reserved.