The so-called TINA trade (“there is no alternative”) suggests stocks are the only place to invest.

  • Cash is yielding nothing unless you want a 1-year CD at 0.10%.
  • The 10-year Treasury (currently at 0.695%) is risky as rates have nowhere to go but up.
  • Corporate bonds might be attractive on a risk/return basis but for the cloudy post-COVID economic environment.
  • Municipal bonds have always been risky given questionable (and that’s being polite) state/local finances that have only been exacerbated by COVID.

Despite the lousy yield investors continue to hoard cash on a level surpassing only that of the 2008 credit crisis.

On one hand sufficient liquidity is always prudent.  On the other the opportunity cost of too much cash creates a drain on long-term returns.

Nonetheless investors in uncertain times and despite TINA continue to stockpile cash in a move that can only be described as an attempt to feel calm and protected.  Eventually this cash will need to be put to work.  Stocks are the only place to go for long-term return.