Nearly five and a half years into this bull market we still sometimes here the “cash on the sidelines” argument as justification for further gains in stocks. The problem is that this argument hasn’t really been valid since 2010. As the chart below shows, the combined total assets in equity mutual funds and ETFs is at a record high level relative to money market assets going back to 1990 (as far as we have data). In other words, the amount of cash in money markets is at the lowest level ever relative to the amount of investment dollars being allocated to stocks. Certainly the low nominal rates offered by money market funds has played a role, but we’re not sure the reason for the phenomenon is all that important.