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Question: Where people invest during stock market crash (USA Q4 2018 crash)?

Assumptions:

• When viewing S&P500 as a proxy to the USA market we can observe that it loses market cap (and price respectively)


• Also, investments AREN'T moving into 'safe heaven' 3-Month Treasury Bills
  
  (based on the assumption that currently it's interest rate rises because investors prefer other means of investing)

Sources:

- S&P 500 price

- S&P 500 market cap

- 3-month Treasury Bills

This question isn't financial advice, just a way to learn/discuss economics/finances.

UPD: I've changed the question because original version has no sense, so you may find some strange conversations.

There is no money, and it doesn’t go anywhere. A company’s market cap is just the market’s opinion of what it’s worth. That opinion changes all the time, but no actual money is involved. Money only comes into it when shares (or derivatives) are actually bought and sold.

The price of U.S. Treasury securities are up in the past month. Gold is up and the Yen is up. The Swiss Franc is not completely at a one month high.

There have been ETF inflows into a Treasury fund that has a duration of about 1.9 years. But it appears that an investor could outperform the income of that fund with a three-month bill in their own Treasury Direct account. However, there is gain in the securities price of the longer term duration.

There have also been ETF inflows into emerging-markets but ETF outflows out of high-yield debt. So I don't agree with the inflows into emerging-markets.

Even six-month non-government bond funds are down in the past month.

But investors that outperform the market over long term periods basically buy what is down as long as there is no bad news specific to the stock or bond being bought.

Other answers list some excellent investment options.

One choice, both obvious and counter-intuitive, depending on how you approach it, is to invest (or continue investing) in stocks. S&P 500 index fund shares are about 20% cheaper now than they were 3 months ago. This is a great time to buy!

Of course, there is no "one size fits all" answer to this question. Time horizon and risk tolerance, among other things, affect your choices greatly. But there is one important thing to keep in mind: what matters is how high your investments are valued at the time when you decide to sell them. Until then, the lower they are valued, the more you can buy.

You are wrong on your assumption about tbills. These are considered a safe haven asset. Getting 2.27% is better than zero or negative. Also they are liquid so you can always get out easily. A long only portfolio manager has a relative benchmark he is trying to beat. So with the S&P heading south, cash is king.

Typically, a couple of the following will be happening:
1) raising cash (if already owning stocks). I.e. selling stock and putting the money into a money market fund. If have cash, put in money market fund.
2) selling calls against the position this offsets partially the loss from the stock going down.
3) a long only portfolio manager (i.e. can't use derivatives) would be doing #1 and has a list of stocks that he/she likes with price entry points. If the stock reaches that point then they will buy some. (Right now things keep going down and so there is little incentive to buy, if you can buy it tomorrow at a lower price). For example AAPL might be too expensive at 210 based upon p/e, dividend yield, but at 170, it might be a buy.
4) a long/short portfolio manager is currently worried that his long short trade is working and most likely is reducing risk if risk is based upon volatility.
5) a long only manager who is required to be at least xx% invested most likely would move to what is considered defensive plays and out of agressive plays (i.e. shift from high beta stocks to low beta stocks (i.e. tech to big pharma/utilities. He would also move out of more speculative plays into more slow and steady wins the race types.