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Big investors have amassed hundreds of billions in cash in recent weeks, setting up the conditions for an enormous risk-on investment in equities.

Goldman Sachs data shows that investors have poured more than $43 trillion into money market funds over the last week. This brings the sum total of cash raised during the past seven weeks at a staggering $226 billion. According to data, the money market stockpile did not shrink in 2021, despite the rise in stocks. Assets under management in cash equivalents stood at a new record $4.7 trillion.

Scott Rubner, an analyst in Goldman Sachs’ global markets division said that his core thesis was that money would come out of negative yielding cash and bonds aggressively, and soon in 2022, following the December board room asset allocation meeting.

Every private wealth advisor around the globe is currently conducting an ‘year end allocation review’ meeting. Rubner explained that it will be clear from the feedback that too many investors have too much cash due to rising inflation.

The cash allocation of investors rose 14 percentage points to 36% this month, a record since May 2020. This is according to Bank of America’s monthly survey of managers of funds.

The January bets by money managers could cause a large amount of cash to move out. According to Goldman’s estimates, January accounts for 134% of yearly flows. This means that the month sees an inflow and the remainder of the year experiences a net outflow.

This speaks also to Wall Street’s “January effect” theory, which states that stocks rise in the first month of each year.

All this cash on the sidelines could be the dry powder that fuels the next leg up in risk assets if investors feel comfortable enough to take on risk. These are the facts S&P 500The market has risen to over 25% in the past year, as a result of increasing inflation and the continuing pandemic of the reduction of monetary stimulus.

Stocks jumped as the market seems to have moved beyond one of the major uncertainties leading up to year-end. in a relief rallyAfter the Federal Reserve signaledIt will also unwind its monthly bond purchases more aggressively. Also, Wednesday’s central bank signaled that its members are seeing three hikes in 2022.

BlackRock strategists affirmed that there will be another year with positive equity returns and a decrease in bonds. “Central banks will increase rates while remaining more accommodating to inflation. “New virus strains may slow the strong restart of economic activity, but it will not cause it to stop.