Cash is getting an alarming amount of love these days.

When investors are nervous, they flee risky assets like stocks for the safety of cash.

That's exactly what's been happening lately. Since July 1, cash and money market funds have easily been the world's most popular asset class, attracting $208 billion of inflows, according to Bank of America Merrill Lynch.

By comparison, investors have poured a relatively paltry $7 billion into stocks and yanked $46 billion from bonds.

It's the latest evidence of the jitters ripping through financial markets amid crashing oil prices, a slowdown in China and soft U.S. economic activity.

"The individual investor is scared by the volatility. They don't want to take risk," said Ed Yardeni, president of investment advisory Yardeni Research.

Interest rates are still extremely low

Cash is in vogue right now even though interest rates remain extremely low, meaning money in the bank earns virtually nothing. In fact, when inflation is factored in, that cash actually loses value.

Banks still aren't paying much interest on deposits, even after the Federal Reserve raised interest rates a tiny bit late last year.

The national average money market and savings account carries an annual percentage yield of just 0.11%, according to Bankrate. Even people who shop around and put their money in high-yielding online banks like Ally Bank and Capital One 360 are getting 1% or less.

Related: The incredible shrinking interest rate

But investors don't care about that right now. They're far more concerned about preserving their wealth. And that strategy has paid off recently.

People who parked their money in cash avoided the stock market's worst start to a year ever. Stocks have stabilized a bit lately but the S&P 500 is still down nearly 7% in 2016.

Through the end of last year, cash actually outperformed stocks and most bond funds, Bank of America said.

Scars from 2008 remain unhealed

In some ways, the allure of cash and fear of risk reflects the lasting psychological effects of the Great Recession, which hammered millions of Americans' retirement accounts.

"We never really got over the trauma of 2008," said Yardeni. "The individual investor was never gung ho about stocks. It's the most hated bull market in stocks of all time."

But does dumping stocks make sense at this point? It matters what you think will happen to corporate profits, the lifeblood of stock prices.

If the global turmoil and cheap oil drag the U.S. into recession, earnings will surely suffer and drag stocks even lower. That rising risk is why investing guru Mohamed El-Erian recently told CNNMoney that investors should put 30% of their assets in cash.

Related: Gold is 2016's most beloved asset

Buying on the dips

But economists surveyed by CNNMoney think there's an 80% or better chance the U.S. avoids recession. That means beaten-down stock prices may end up looking pretty cheap soon.

"Now is the time to be buying, not sitting in cash. But most investors are not contrarians. They like to buy when they see momentum to the upside," said Yardeni.

David Bianco, chief U.S. equity strategist, thinks the S&P 500 will zoom 15% from current levels to end the year.

"This is an opportunity for people who see good value in the market. People will find out over time the market is resilient," he said.