Cash is an important resource for businesses and investors alike. Cash is synonymous to liquidity. Stock market investors stay ‘cash-ready’ to buy when prices of securities go down. They may also liquidate or turn their investments into cash if prices have peaked and may go down in the future.
Cash in Markets
Cash in markets is considered to be the most important input. When investors expect the markets to go down, they move some of their profits / holdings to cash. This generally happens in bull markets. Cash is kept ready for buying into dips.