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.

BREAKING DOWN '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. Investment Vehicle

    A product used by investors with the intention of having positive ...
  2. Fixed-Rate Certificate of Deposit

    A certificate of deposit (CD) which has a set interest rate to ...
  3. Near Money

    An economics term describing non-cash assets that are highly ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  5. Brokered Certificate Of Deposit

    A certificate of deposit (CD) that is purchased through a brokerage ...
  6. Inflation-Linked Certificates of ...

    Federally insured debt securities that are similar to regular ...
Related Articles
  1. Personal Finance

    The 7 Best Places to Put Your Savings

    You work hard to put your money away for the future, but where should you keep it?
  2. Personal Finance

    Warren Buffett: Be Fearful When Others are Greedy

    It is prudent for the investor to understand when the party has gone on long enough and the clock is about to strike midnight. Be fearful when others are greedy.
  3. Investing

    Certificate of Deposit (CD)

    A certificate of deposit, or CD, is a common financial product sold by banks, thrift organizations and credit unions. This type of product is often called a time deposit. CDs are insured up to ...
  4. Personal Finance

    5 Mistakes You're Making With Money Market Accounts

    Money market accounts can be helpful "parking spots" for investors. Here are five key things to keep in mind when opening an account.
  5. Investing

    Money Market vs. CDs: Which Is the Better Investment?

    Find out which short-term savings vehicle, a money market account or a certificate of deposit, is a better investment for your needs.
  6. Insights

    Economist Guide: 4 Lessons Warren Buffett Teaches Us

    Learn how Warren Buffett's most famous investment advice can teach investors to manage their own money and practices.
RELATED FAQS
  1. How safe are money market accounts?

    Learn the difference between a money market account and a money market fund. Both savings vehicles are relatively safe, but ... Read Answer >>
  2. Are short-term investments a good strategy for cash-rich small businesses"?

    Learn more about investment choices available to small businesses and whether short-term investing is a smart choice for ... Read Answer >>
  3. How do I calculate a bond's modified duration using Excel?

    Understand the benefits of investing in a money market mutual fund, and learn why investors use this type of account in volatile ... Read Answer >>
  4. What determines the interest rate in my money market account?

    Placing funds in a money market account may provide a higher interest rate than a savings account due to the underlying securities ... Read Answer >>
  5. What is the safest investment?

    Learn about some of the safest investment types. Find out which investment categories offer the best protection on your principal ... Read Answer >>
  6. Are certificates of deposit a kind of bond?

    There is a fair amount of overlap between certificates of deposit (CDs) and bonds; they are both fixed-income securities, ... Read Answer >>
Hot Definitions
  1. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
  2. Contango

    A situation where the futures price of a commodity is above the expected future spot price. Contango refers to a situation ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Acid-Test Ratio

    A stringent indicator that indicates whether a firm has sufficient short-term assets to cover its immediate liabilities. ...
  5. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
  6. Taxes

    An involuntary fee levied on corporations or individuals that is enforced by a level of government in order to finance government ...
Trading Center