Investing Strategies – What Does This Mean?

Before engaging in any short-term investing strategies, here is an interesting piece of information that you need to consider.

BNY Mellon Bank just announced that they are actually going to start CHARGING their depositors who hold large sums of money in their bank.

As you know, this is highly unusual, and should affect your investing strategies in various ways.

Normally, of course, banks pay interest for deposits in their institution. This is a normal course of business.

A bank announcing that, rather than paying interest on deposits, they are actually going to charge an annual “holding fee” on large deposits is not only highly unusual, but it is also very alarming for average investors and traders.

Consider what this means.  Most banks are already flush with cash.  Despite what you might believe, they actually have stronger capital positions than they ever have before! They have more cash than they can (or will) lend out.

And they are having such a rush of big-time investor money flooding the bank that one huge player is actually charging people to hold their cash for them.

And investors are willing to pay it. These mega-investors are so scared of what’s going on in the market that they are actually willing to pay a fee to have their cash in a safe place, away from the markets.

What does this mean to the average investor, in relationship to your investing strategy?

You’ll have to decide for yourself. But in my opinion, if the smart money is still flooding the banks instead of being dumped into the stock market, then you might want to think long and hard before taking a long position in the market.

For you Traders, this is a potential sign that a short run might be in order.  Taking a strategic short position in futures contracts on the S&P or the Russel might not be a bad move, assuming you get a good fill price. Would be worth a look.

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