'Cash Is No Longer Trash' Preferred Theory In 2023: Survey - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

Two-thirds of respondents of a survey reportedly indicated the cash in their portfolios would be a net positive this year, reinforcing the ‘cash is no longer trash’ theory that has been gaining prominence in recent times.

The verdict came from professionals who took part in the latest MLIV Pulse survey, according to a Bloomberg report.

Also Read: How To Invest In Startups

The allure of cash stems from looming fears of a recession in the backdrop of longer-for-higher rate hikes expected from the Federal Reserve as inflation continues to remain sticky while the economy still runs hot.

According to the survey, only 17% of survey respondents said it’s highly possible an average active large-cap U.S. equity fund will outperform a passive fund tracking the S&P 500, after fees, this year.

So far this year, the markets have given positive returns despite the rout seen in February. The SPDR S&P 500 ETF Trust SPY gained over 6% on a year-to-date basis while the Invesco QQQ Trust Series 1 QQQ gained over 13%.

Expert Take: Morgan Stanley’s chief U.S. equity strategist Michael Wilson told Bloomberg TV last week the S&P 500 Index could decline close to 20% due to weak corporate earnings. Coupled with that, an expected rise in rates and unstable investor sentiment may also not bode well for Treasuries and bonds.

Leo Kelly, chief executive officer at Verdence Capital Advisors told Bloomberg, “We’re encouraging people that it’s okay to hold cash, that it’s not just a lead weight on your ankle weighing you down.”

“You can get a nice yield and there will be a lot of volatility in the markets and lots of chances to put that cash to work at attractive levels,” Kelly said.

Read Next: Paul Krugman Says This Is The ‘Most Puzzling Chart’ In Economics Right Now

Image and article originally from www.benzinga.com. Read the original article here.