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Hi [USER=53133]@fiftyeight[/USER]

I obviously created the chart poorly because what you should get from it is that cash holdings compared to equity holdings is high.

The amount of cash held as a ratio of cash/equity increased after the GFC to early 90’s recession levels and has stayed there since.

The data is agreeing with what you have observed.

I have seen data that SMSF cash allocations are still elevated. Not sure about large super funds, they don’t change their plan asset allocation very often, however their overall cash position would be dictated by people choosing balanced/conservative/cash options over growth options etc. So, I suspect cash in these funds are also likely to reflect private and SMSF data.

The RBA seems to have basically taken the position of “stuff this” the hoarding of cash and the lack of investment has gone on long enough and created underutilisation in the physical economy, so they are dropping rates. If people respond how the RBA wants, there is a lot of cash on the sidelines to invest more productively to a) stimulate earnings and/or b) push up earnings multiple of existing assets – hence fire power for continuation of a bull market.

Of course, people might give the RBA the finger and continue to prefer cash even at zero or negative rates.  I’m not one of those people – I love equities, hate cash.