Trillions in Cash Now Hitting Markets

“A trillion here, a trillion there and pretty soon you’re talking about real money.”

— Daniel Hannan

Right out of the starting gate stocks are off to the races in 2019.

The S&P 500 gained 11% over just the first two months of the year, its best start since 1991! And of course I keep hearing a growing chorus of boo-birds telling investors that the stock market has risen too far too fast.

Sure, a two-month gain of 11% is enough to be considered a great gain for an entire year, but history has shown time and again that fast starts for the stock market often lead to even bigger gains down the road.

Case in point, the jack-rabbit start for stocks back in 1991 saw the S&P 500 jump 11.2% in the first two months, similar to this year. And guess what? Stocks went on to soar 26.3% for the full year, more than doubling the early gains.

Plus, there are two tidal waves of cash about to send stocks even higher.

Tidal Wave #1: Trillions of Private Equity Cash

F. Scott Fitzgerald was right: The very rich are different, or at least they invest differently than you and I. They invest in hedge funds and private equity deals that are out of reach to most of us mere mortal investors. And the wealthy are luring money into private equity funds at a furious record pace.

sky high

According to Bloomberg, private equity funds are sitting on $1.2 trillion of cash at the beginning of 2019. To put that in perspective, that is a whopping 17% increase, or about $200 billion more, than just a year ago.

You can bet these well-heeled investors aren’t paying big fees to private equity funds so they can earn paltry money market rates. So you can be assured that trillion-dollar private equity cash hoard will get invested, most likely into high-quality dividend-paying stocks.

Tidal Wave #2: Trillions of Corporate Buybacks

According to Bank of America Merrill Lynch, corporate America is about to buy back a record amount of its own stock.

In just the first two months of 2019, American corporations have increased their buyback pace by an astonishing 91%!

Think about that. Corporate America bought back $1 trillion worth of stock in 2018. If this pace were to continue for the full year, that adds up to a staggering amount of buying power.

No wonder the Dow Jones industrial average has been up for 10 weeks in a row!

However, we’ve only seen the first of those two trillion-dollar tidal waves hit the stock market. While I don’t expect the stock market to go straight up (it never does), I am very confident that there are even more profits to come.

As they say, a trillion here, a trillion there and pretty soon you’re talking about real money.

Don’t shy away from this powerful bull market move.

Here’s to growing your wealth,

Mike Burnick

Mike Burnick
Chief Income Expert, Mike Burnick’s Wealth Watch

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Mike Burnick

Mike Burnick is the editor of Mike Burnick’s Wealth Watch, Infinite Income, Amplified Income and Millionaire Moments. Mike has been bringing his trading strategies to the masses for over 30 years. He has been with Seven Figure Publishing since 2017. In 2018, the average return of Infinite Income beat the...

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