Thursday, September 23, 2010

20 Consecutive Weeks Of Fund Outflows And 71 Billion Withdrawn From Equity Funds

Did someone said that global markets is on a BULL run?

Apparently not for the American stock markets.

From ICI website, equity fund investors had withdrawn another 3.6 Billion from their equity mutual funds!




And that's 20 consecutive weeks of fund outflows!

Twenty!



And yes, that's some 71 Billion withdrawn from the equity funds!

Imagine... funds without funds? How?

And the question to ask is WHY? They Just Don't Trust Wall Street? Is that the main reason?

Or do they really know and understand that their economy and business fundamentals is really poor?

And consider the fact that the insiders are selling!

How?

Past postings tracking the fund outflows.

Let me repeat again...


It be wise not to ass-u-me. This posting merely highlights the very fact that Americans are withdrawing their money from their long term equity funds. And they have been doing it in regardless of whether the stock market is going up or down.

And naturally it would be damn silly to suggest that this posting is suggesting anything!

LOL! Sorry but I need to put this disclaimer in. The local markets is hot and people have nothing better to send in senseless comments saying I am suggesting this and that.


ps: So why do you think the Americans are withdrawing money out continously from their long term equity funds? Let me list out some possible flawed answers. Let me know what you think could be the reason....

  • They hate the stock markets.
  • They no longer have faith and they no longer trust the stock markets, more so with the recent FLASH crash. Yes, HFT should be outlawed!
  • They think the stock markets is going to crash because they can see it in their daily lives that their economy is sooooooooooo bad.
  • They found a better option to invest their money.
  • They need the money!

How?

Would you have a better reasoning?

3 comments:

kokanart said...

Moola,

It's time to highlight the other side of your obsessive focus:
US small investors fleeing their mutual funds.

A recent report on Bloomberg says:

Record-low interest rates are stoking the biggest increase in
share buybacks ever.

U.S. companies have announced $258 billion in buybacks so far this year,
compared with $52 billion in the first three quarters of 2009, according
to data compiled by Birinyi. The almost fivefold increase is the largest
for any January-to-September period since at least 2000, when the
Westport, Conn.-based research firm started tracking the data.

Corporations are using debt to pay for buybacks.

Companies from Microsoft to PepsiCo and Hewlett- Packard are taking
advantage of low-cost financing, purchasing their stock to boost
per-share earnings.

So, are the small investors the smart money this time or will it be
the big insiders ( thru company buybacks ) ?

Time will tell ...

PS: the local market may be hot but we are discussing the US market.
Also, as swifz pointed out, it is senseless to highlight only one side of the story.
Do try to be more balanced.
Mr. Soros said: I'm only rich because I know when I'm wrong.

kuan said...

Moola ,
I forgot to add my last line -
Can millions of small investors be wrong ?

Why not? They can also be right, when people like Soros are wrong.

No one's perfect all the time.

Moolah said...

kuan:
Hmm... quote: "I forgot to add my last line - "

you forgot to add?

errr... what do you mean by forgot to add 'my last line'?

Are you saying that you and "kokanart" is the same?

LOL! LOL! LOL!

ps: so fun to post in multiple 'names' eh?

ps/ps: next time, don't bother.

ps/ps/ps: try growing up. :-)