Linz’s Musings – Cash chests and where are they being Invested?

I was doing some ‘market research’ the other day, and came across an amazing article in the U.S from the Economist which was talking about the amazing chests of cash that many households particularly in the U.S are sitting on!

I’ll admit I had to do a bit of a double take, as most of the media across the board, in AU, U.S and NZ is pretty much all ‘doom & gloom’ when in reality, most of us savvy investors know this is not the case.

Firstly though, it was good to see an article finally saying this are not as bad as they seem.  I have been saying for some time, with such low interest rates, virtually worldwide, and billions (or trillions, depending on the market) of dollars being pumped into markets, thing are certainly pumping.

But one area I did not consider, is that will all the lockdowns, fear the negative press over the past 12 months, households’ options, and/or their want, to spend money has been greatly reduced!

Looking at the U.S specifically now, not only are most households up on income due to stimulus checks/packages etc, but they have had little options to spend this money…

Hence… Boom!  Cash chest

And check out this little graph below from JP Morgan Chase Bank, it’s the poorer households who are better off…

Who would have thought…?

So, I started looking into what people are investing in, with investing being the new black this year… (everywhere you turn now, it’s all about where are you INVESTING that cash of yours…)

Watching the Millennials, and while many give them a lot of crap, I have found they are one of the hungriest and switched-on generation regarding wealth, property is not their go-to.

With such high entry points, its not something most 20-year-olds are looking into.

(Although there are many ways to get into the markets & I do have a STACK of low entry, high cashflow investment strategies in the U.S, so hit me up kids!)

The search engines are being overloaded with trading, cypto and share searches, people wanting to know how to do this.

And the Millennials are the most ‘tech-savvy’ of the generations too so trading platforms and crypto/blockchain etc does not scare them.

But, if you no longer 20-something, and don’t know Blockchain from Blockbuster, then where are you looking?

Property…

And if you are in the poorer median household income, and suddenly have cash, what do you do…

Buy yourself a house!

And suddenly… Boom!  We have a housing market going crazy…

So right now, for me, the owner occupier flips, are where it is at!

How are you finding this booming market affecting your strategies?