If I Just Had The Money...

5/4/2020

 

It’s mid-April 2020, and the American economy has been laid to waste by the coronavirus and the accompanying reaction from corporations and businesses.

But investors still want to find a way to invest in order to increase their assets, and a Spectrem survey showed just how investors would have done so in that mid-April time period.

As part of its monthly research with investors, Spectrem proffers an imaginary $100,000 and asks “How would you invest this money?’’ Investors are offered choices ranging from individual stocks, stock mutual funds, bonds, real estate, annuities, alternative products or cash.

In April, cash won.

Among all investors divvying up the $100,000, 32.2 percent of the funds would be invested in cash vehicles such as bank accounts or money market funds. Spectrem has asked that question of investors monthly since 2007, and only during a four-month period in 2008 was cash receiving as much as 32 percent of the imaginary funds. For comparison, in January, only 19.2 percent of funds were going into cash products.

Stock mutual funds are always the most popular answer, but not so in April, as only 26.9 percent of funds were placed in that type of product. Only 18.4 percent of the funds were invested in individual stocks, but combined, more than 45 percent of the funds were going into stocks, an indication that some investors were thinking about taking advantage of the low stock prices and hoping for a significant rebound in future months.

Bond investing was down, with 8.6 percent going to bond mutual funds and 2.5 percent to individual bond. In most months, 12-15 percent of the funds were placed in those safer products.

Investing in real estate, annuities and alternatives were all down as well.

When the May Spectrem research is released, it will be interesting to see if there is any recovery in terms of the stock market over cash products. 

 

 

©Spectrem 2020

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