Planning Briefs

Financial media coverage of the explosion in the nation’s money supply, M2, is scant. With so much going on in the world, the parabolic rise in M2 has received little press, but it could be the most important investment trend of 2021.

M2 consists of currency held by the public, plus checking, savings and money market accounts.

M2 has skyrocketed because of the financial relief appropriated in the March 23, 2020 legislative response to the Covid crisis, and because Americans are staying home and saving at an astronomical rate since April 2020, when the relief payments first hit their accounts. It’s a cash hoard unprecedented in modern history!

Where will that cash go in 2021? With interest rates low and the Fed saying it is not planning to raise rates for the foreseeable future, bonds are not an attractive investment.  Likely places for the cash to go are stocks and real estate.

If Americans deploy the glut of savings into stocks and real estate, are you in position to benefit? While it is impossible to time the market, it is possible to assure you do not miss out on the expected investment trends.

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