Money On The Sidelines

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DEFINITION of 'Money On The Sidelines'

The cash that is held either in savings or in low-risk, low-yield investment vehicles, such as certificates of deposits (CDs), instead of being placed in investments that have the potential for greater rewards, such as the stock market. Money on the sidelines is kept away from risk, especially during periods of economic or market uncertainty.

INVESTOPEDIA EXPLAINS 'Money On The Sidelines'

Money on the sidelines describes the vast amount of cash that is held in low-risk investments while individuals and companies wait for economic conditions to improve. Legendary investor Warren Buffett is known to take advantage of times when most investors are on the sidelines, opening or adding to positions in undervalued companies at bargain prices. Buffet has said of his investing strategy, "Be fearful when others are greedy, and greedy when others are fearful".

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RELATED FAQS
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    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
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    Money market mutual funds are designed to offer savers low-risk, liquid and short-term investments. They are normally offered ... Read Full Answer >>
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    The retail sector provides growth investors with a great opportunity for better-than-average gains during periods of market ... Read Full Answer >>
  4. What is the correlation between term structure of interest rates and recessions?

    There is no question that interest rates have enormous macroeconomic importance. Many economists and analysts believe the ... Read Full Answer >>
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