While the federal reserve’s dollar ‘printing press’ keeps churning, all the excess dollars still aren’t ending up in stocks.
Latest data from the Investment Company Institute shows that long term mutual fund flows for stocks were negative $9.8 billion during the last four weeks ending December 2nd.
Thus while the U.S. stock markets treaded water in November, mutual fund investors were heading for the exits, as their sentiment toward stocks remains weak. Just as it’s been since August.
What are average investors in love with? Bonds. If excess dollars are supporting any market, it will have to be this one. $36.8 billion of new mutual fund money entered bonds just recently, which is a continuation of the massive bond-buying trend that started in January.
Even though bonds generally command higher quantities of investment funds than stocks all else being equal, the negative vs. positive flows shown in the chart below make it pretty clear where the current
market consensus lies. The average mutual fund investor remains scared of stocks and fond of bonds.
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