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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (85714)	11/20/2000 11:18:23 AM
From: Tommaso	Respond to of 132070

To some extent the "growth" of mutual fund cash balances is just a function of their size relative to the size of the fund. So that the same amount of money that makes up 4% of a fund with the NAZ at 2500 equals 8% with the averages cut in half. But on top of that, fund managers do, of course, become more cautious so that at the bottom of a bear market there is typically 12% or more on average of cash and a whole lot more in some funds. Back to the savings issue: as you may know, I am an unreconstrutable bear and pessimist, but to say that we have a negative savings rate in this country does neglect several sources of wealth, however much at risk these sources may be. I guess is hard times people do start setting aside more of their salaries (if they still have them). I had an Italian friend once who constantly marveled at the lack of savings in American families. He said in Italy everyone had something put away in some form and many Americans apparently had nothing at all.