100x Increase in Interest Rates

This Trend Is Up a Whopping 10,240% Since March 2021
How millionaires are handling financial uncertainty

On March 1, 2021, the 6 Month Treasury Bill Rate was a measly 0.05%.

The March 2021 Elliott Wave Theorist, a monthly Elliott Wave International publication which covers major financial and social trends, said:

If the rise in interest rates finally spreads to the short end of the curve so that Treasury bill rates rise, too, it will be a boon for holders of interest-bearing cash equivalents. It hasn’t happened yet, but it should.

The Theorist was spot on. As of June 30, 2023, the Treasury bill rate is 5.17%. That is a whopping 10,240% increase from March 1, 2021.

Many millionaires are saying, “What’s not to like?”

Here’s a quote from a June 28 Marketwatch article:

… rising interest rates, an uncertain economic outlook and the constant drumbeat of recession have led high-net-worth individuals to change their investing habits: they’re keeping their money in cash and cash equivalents at the highest rate in more than a decade.

Specifically, the article notes, many millionaires put 34% of their wealth in cash and cash equivalents in 2022, up 10% from 2021.

So, the name of the game is wealth preservation while enjoying a relatively risk-free return of 5% without the drama of the stock market.

The global head of Capgemini Research Institute for financial services spoke of the cash and cash equivalents’ allocation of high-net-worth people when he said:

“… the jump year-over-year has never been so high.”

Perhaps these millionaires are onto something.

The recently published July Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets, discusses warning signs for the stock market, including momentum considerations:

Fewer NYSE stocks on average have been closing higher each day, indicating a thin advance …

Another warning sign is the stock market’s Elliott wave structure, as those who use Elliott wave analysis are well aware.

If you’re unfamiliar with Elliott wave analysis, or simply need a refresher, read Frost & Prechter’s book, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from this Wall Street classic:

The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market’s general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.

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