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U.S. savers go all in on 'cult of equity'

  //stocks-investing.news-articles.net/content/202 .. 9/22/u-s-savers-go-all-in-on-cult-of-equity.html
  Published in Stocks and Investing on Monday, September 22nd 2025 at 11:56 GMT by The Globe and Mail
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The “Cult of Equity” – How U.S. Savers Are Rethinking Their Portfolios

The Canadian press has long been fascinated by the investment habits of Americans, and a recent Globe and Mail piece (“U.S. savers go all‑in on cult of equity”) offers a sharp look at why millions of Americans are now shunning cash‑equivalents in favor of equities. The article is more than a curiosity piece; it’s a case study in how macro‑environmental forces—low interest rates, persistent inflation, and a growing appetite for risk—are reshaping the way the average investor thinks about wealth.

1. A Shift from Cash to Shares

For years, U.S. households and pension plans have treated cash‑equivalents (money market funds, short‑term Treasury bills, and certificates of deposit) as a safe harbor. This view has been reinforced by the Federal Reserve’s historically low policy rates, which have kept the returns on these instruments barely above zero. The Globe and Mail analysis shows that since the onset of the pandemic, net outflows from U.S. cash‑equivalents have turned into net inflows, with a significant portion of the capital being redirected into equity vehicles—exchange‑traded funds (ETFs), mutual funds, and direct stock purchases.

According to the article’s data, the U.S. equity market has absorbed a record $1.6 trillion in net inflows over the past year, outpacing inflows into fixed‑income funds by a wide margin. This trend is not limited to institutional players; individual savers, who now hold a larger share of their retirement savings in equities, are contributing to the volume.

2. Why Equity Is the “New Cash”

The headline of the Globe and Mail story hints at the cultural angle: a “cult of equity.” The authors point out that a sizable segment of investors now equates equity ownership with stability, citing the recent resilience of large‑cap indices even amid volatile bond markets and market corrections. When the article examines the performance of equity funds during the 2022 market dip, it notes that many funds, especially those focused on technology and growth, rebounded quickly—an attractive narrative for a generation that values speed and resilience.

In addition, inflation has made the traditional cash stash less attractive. While cash can erode purchasing power, equities have historically offered a hedge against inflation. The article explains that even in a high‑inflation environment, equity funds have managed to deliver real returns for long‑term investors, a fact that has reinforced the narrative that equities are “not just growth assets, but also a way to keep pace with rising prices.”

3. The Role of Technology and Accessibility

Another factor fueling the move is the ease with which investors can now access equity markets. Digital platforms, robo‑advisors, and commission‑free trading apps have lowered the barriers to entry. The Globe and Mail writers highlight how apps like Robinhood and Fidelity’s “Wealth Management” service have made it simple for a 25‑year‑old to buy a slice of a diversified ETF with a single tap. As a result, equity investing is no longer a domain reserved for Wall Street professionals or institutional investors; it’s become part of everyday financial planning.

The article also notes that the popularity of index funds—particularly low‑cost S&P 500 ETFs—has surged. Investors who might have previously opted for cash are now choosing a “passive” exposure to the stock market, arguing that a broad market approach offers both growth potential and downside protection.

4. Risks and Concerns

While the shift is dramatic, the Globe and Mail piece doesn’t shy away from the risks. Critics warn that moving too much capital into equities can create systemic bubbles, especially when valuations climb without a corresponding rise in fundamentals. The article quotes analysts who caution that the “cult” mindset can lead to herd behavior, amplifying volatility when market sentiment turns negative.

Moreover, the shift to equities may exacerbate wealth inequality. High‑income households, with deeper pockets, are better positioned to weather downturns, while lower‑income savers—often with tighter budgets—might find themselves exposed to market swings they cannot afford to endure.

5. Implications for Canada

Although the story focuses on U.S. savers, the implications ripple across the border. Canada’s lower long‑term interest rates, coupled with a relatively weaker dollar, make Canadian equity markets attractive to U.S. investors. The Globe and Mail article points out that Canadian pension plans and individual investors have begun reallocating a portion of their portfolios to U.S. equities, citing the broader global trend.

The authors suggest that Canadian regulators and financial advisors should be prepared for increased demand for diversified portfolios that balance risk and return. They also highlight that Canadian institutions could learn from the U.S. shift by offering more equity‑centric products that are tailored to the Canadian tax landscape.

6. A Cultural Shift, Not Just a Tactical One

At its core, the Globe and Mail piece frames the move as part of a cultural shift. Millennials and Gen Z, who grew up in an era of high technology and online commerce, are less inclined to hold cash and more comfortable with digital financial tools. The article paints a picture of a generation that values “growth” in all its forms—financial, professional, and social.

This shift is not entirely new: historical cycles have shown that investors tend to favor cash during periods of uncertainty and equities when confidence is high. However, the speed and scale of today’s shift, driven by technology and persistent macro‑environmental factors, suggest a new paradigm. It’s a paradigm in which equity is no longer seen as an aggressive, high‑risk option but as a baseline, even safe, component of a well‑balanced portfolio.

7. The Bottom Line

The Globe and Mail analysis provides a comprehensive look at the reasons behind the U.S. savers’ “cult of equity.” Low interest rates, inflationary pressures, and the democratization of equity investing through technology are driving this change. While the shift promises higher growth potential, it also brings heightened volatility and a risk of overvaluation. For Canadians, the trend underscores the need for thoughtful portfolio construction that balances risk, diversification, and tax considerations.

In a world where financial instruments are more accessible than ever, the question isn’t whether to invest in equities, but how to do so in a way that aligns with long‑term goals and risk tolerance. The “cult” is a reminder that the narrative around money is constantly evolving—and that the best way to navigate it is with informed, deliberate action rather than blind following.