Money On The Sidelines

AAA

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".

RELATED TERMS
  1. Cash

    Legal tender or coins that can be used in exchange goods, debt, ...
  2. Currency

    A generally accepted form of money, including coins and paper ...
  3. Net Liquid Assets

    A measure that examines a company's net liquid financial assets. ...
  4. Liquid Asset

    An asset that can be converted into cash quickly and with minimal ...
  5. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
RELATED FAQS
  1. How does the risk of investing in the industrial sector compare to the broader market?

    There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
  2. What are some examples of money market funds?

    Money market mutual funds are designed to offer savers low-risk, liquid and short-term investments. They are normally offered ... Read Full Answer >>
  3. How can I hedge my portfolio to protect from a decline in the retail sector?

    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 >>
  5. Why should an investor in the retail sector consider the Consumer Confidence Index?

    Investors in the retail sector should consider the Consumer Confidence Index, or CCI, because it measures how consumers feel ... Read Full Answer >>
  6. Which type of retailers tend to perform best during weak periods in the economy?

    Retail is a broad investment sector comprising many different market segments, such as automotive, building supply, grocery ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Savings Bonds For Income And Safety

    Bonds offer undeniable benefits to investors, including safety and tax advantages.
  2. Active Trading Fundamentals

    Using Logic To Examine Risk

    Know your odds before you put your money on the table.
  3. Investing Basics

    Redefining Investor Risk

    Changing the way you think about time and risk can change the way you invest.
  4. Insurance

    Breaking The Buck: Why Low Risk Is Not Risk-Free

    Money market funds have been assumed to be safe investments, and they are - but only to a point.
  5. Retirement

    Index-Linked Certificates Of Deposit: Upside Potential, Low Risk

    Index-linked CDs generate returns similar to indexes, without the potential for loss.
  6. Personal Finance

    10 Jobs to Avoid Right Now

    These jobs may never recover to pre-recession highs, can easily be outsourced overseas or may disappear altogether as technology intervenes.
  7. Economics

    6 Factors That Point to Global Recession in 2016

    We may be on the verge of another global recession.
  8. Stock Analysis

    The 3 Best Buy-and-Hold Stocks For the Next 10 Years

    Find out what makes electric cars, burritos and muscle shirts great buy-and-hold additions to your long-term portfolio.
  9. Savings

    Get Better Mileage Out Of Your Savings At The Pump

    U.S. drivers are spending 90 cents less on a gallon of gas than a year ago, about more than $10 a tank. If that’s you, what are you doing with that money?
  10. Investing

    Why Higher Rates Could Be Good News For Consumers

    While rates remain extraordinarily low by historical standards, in the last few months we have witnessed a modest change in the environment.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!