Cash Is a Viable Investment Again; With Stocks and Bonds Looking Less Attractive, Money Markets Perk Up
Dow Jones Newswires</br></br>Sexy it isn't, but cash is catching the eye of those on Wall Street and Main Street alike.</br></br>Considered a sucker's bet in the late 1990s -- when stocks, especially technology shares, boasted solid double-digit returns -- cash also didn't fare much better in the first half of this decade. Rapid-fire interest-rate cuts by the Federal Reserve in 2001-03 made the cost of money cheap, and returns on parking funds in money-market accounts minuscule.</br></br>That is changing, but the pace of Fed interest-rate increases has been so gradual that it is only now beginning to register with investors who are casting around for better returns given the lackluster performance of riskier stocks this year.</br></br>It isn't only stocks that stand to lose as these interest-bearing instruments ascend to new heights. Longer-dated Treasury bonds are also looking increasingly unattractive in a world where the virtually risk-free cash investment promises nearly the same return as a 10-year note.