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Investors could be disappointed if they anticipate tons of money waiting to get back into the stock market, since "cash on the sidelines" is much less than estimated, Goldman Sachs [GS
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] analysts said.
Based on their calculations, net equity inflow from individuals, institutional investors and corporations over the next several quarters could total $600 billion, the analysts said in a research note on Wednesday.
"'Cash on the sidelines' is much less than the $3.4 trillion in money market mutual fund assets that market participants typically cite as the No. 1 reason stocks are poised to rally," analysts wrote.
Investors have been keeping cash in money market mutual funds, which are considered a safe haven compared with equities.
"Cash on the sidelines" is often cited as a likely reason why stocks stand to gain more. The Standard & Poor's 500 index is already up some 55 percent since its early March low.
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The potential inflow of $600 billion over a 12-month period could be a "bullish backdrop" for investors but "will not be sufficient to sustain a robust market rally without accompanying improvements in the U.S. economy and the corporate earnings outlook," the analysts wrote.
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