Some still fear a bear market, and we could indeed have dips, but look at these facts:
"Gun-shy mutual fund managers are sitting on more than $660 billion in cash, the biggest hoard since the mid-1990s, according to John Lloyd, Merrill Lynch's mutual funds analyst.
``This significant amount of cash on the sidelines is basically housed in money market CDs and savings accounts,'' he says. ``And the reason that people are holding cash is that the returns from CDs and savings accounts have exceeded stock mutual funds.''
Another big question is whether the hundreds of billions of sideline cash will be just a one-time shot for stocks or set the stage for the next bull market.
Greenspan The Best Stock Broker Americans Ever Had
``Wall Street is so convinced that Greenspan will bail them out, that they are inclined to take greater risk than they would otherwise,'' says Ray DeVoe, market strategist for Legg Mason. ''The assumption is that in the event of a market panic, Greenspan will cut interest rates or just do something to smooth out the problem.''
DeVoe said he has heard of a ``Plunge Protection Team,'' a sort of fiscal commando unit involving people from the Fed, Treasury, the Comptroller of the Currency and the White House, who would formulate what is needed to prevent a massive selloff in stocks. |
