Even after reducing money-market accounts by 11 percent this year, investors have cash equal to 73 percent of Standard & Poor’s 500 Index companies’ net assets, according to data compiled by the Investment Company Institute and Bloomberg. At the peak of the bull market in 2007, the measure of buying power was 62 percent.

I’ve never really understood the “money on the sidelines” bit for judging stocks. Let’s say that there are only two stock traders in the world: me and Bob. I have 100 shares of stock A and 100 dollars in a money market account. Bob has 100 shares of stock B and 100 dollars in a money market account. Let’s now say that stock B looks cheap to me, so I offer Bob 100 dollars for 50 of the shares. How much money is in money market accounts? There is still 200 dollars. Money doesn’t enter of leave money market accounts because of stock trading. All that matters is the relative demand for cash vs. equities of individual traders.

Let’s say that company C decides to have an IPO, and Bob decides to participate. He buys 100 shares of stock C for 50 dollars. Now the total in money market accounts has been reduced. That money has been transformed into corporate assets. Corporate and government bond offerings also can absorb some of the money.

You may compare activity in bond auctions and IPOs to the stock rally. If that’s the purpose, then there’s some reason to cheer for this money on the sidelines. However, there’s no direct link between the money that sits in money market accounts and the room a stock market has to move in one direction or another.