By Paul Price of Market Shadows
Money Managers: ‘All In’ at Year End 2013
This weekend’s Barron’s explained why we might have seen the short-term top right at the end of last year.
By December 31, cash reserves in equity portfolios dropped to levels not seen in more than one year. Neither public nor private fund managers wanted to be called out for having held high cash reserves in what had been an unrelenting bull run.
Sideline cash is the lifeblood of uptrends. When the fuel for the fire is exhausted, momentum reverses.
The Lipper and ICI figures always are backward looking. If the end of January numbers show a large jump in cash as a percentage of equity portfolio assets, we might be ready to resume the bull market.
