Record Cash on the Sidelines, GDP Surprise, & The Best Investment Advice Ever

The guys are back with a new episode of Money Wise. As always, they kick the show off with a look at the numbers coming out of Wall Street last week. Unfortunately, the markets ended the week slightly lower on very light trading volume ahead of the Labor Day holiday, with the Dow down 0.2%, the S&P 500 down 0.1%, and the NASDAQ down 0.2%. That being said, year-to-date, all three indexes remain positive, led by the NASDAQ at +11.1%. The big economic highlight was the second reading of Q2 GDP, which surprised to the upside at 3.3%, showing resilience in the U.S. economy despite ongoing debates about tariffs, inflation, and interest rates.

The guys also dig into M2 money supply hitting the highest level in recorded history, signaling trillions of dollars sitting in cash that could eventually find its way into markets. The team points out the disconnect between media-driven negativity and the fundamentals, noting that since November 2024 the S&P 500 is only up 7.8%, hardly an overheated run. In the second half, they turn to investor education, addressing misconceptions about portfolio construction and why a balanced, thoughtfully diversified strategy matters more than trying to be “pedal to the metal” at all times.

Record Cash on the Sidelines

The latest data shows the M2 money supply, the broad measure of cash in money markets, checking, and savings accounts, has reached the highest level in recorded history. This massive pool of liquidity highlights just how much cash is sitting on the sidelines, waiting for a home. While some of it may flow into fixed income as investors look to lock in yields, much of it has the potential to move back into equities, offering fuel for future market growth. For long-term investors, it’s a reminder that there’s still plenty of dry powder in the system despite all the short-term noise.

In the second hour, the Money Wise guys share The Best Investment Advice Ever . You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.