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Investors have pulled $347B out of stock mutual funds over the past 3 years, according to...

Investors have pulled $347B out of stock mutual funds over the past 3 years, according to ConvergEx. There's risk-aversion of course, says Nick Colas, but the aging population - favoring income over growth - may be at play. Equity ETFs - possibly representing a younger demographic - have added $94B during the same time frame.
Comments (15)
  • I wonder to what extent of these withdraws are being used to pay for daily expenses...
    7 Sep 2012, 12:56 PM Reply Like
  • Bullish. When investors put money into mutual funds is when we have to worry, as they usually chase rallies and hold the bag at the top.
    7 Sep 2012, 12:56 PM Reply Like
  • Can someone please explain what this means for younger investors (30's and younger). I know it's difficulty yo predict because the past several decades may have involved a growing population.
    7 Sep 2012, 01:00 PM Reply Like
  • Mr Meinykevich, as a young man, you should continue with an investment plan, as the world will always need a source of capital...
    7 Sep 2012, 01:16 PM Reply Like
  • Stephen:

     

    Equities represent high risk high reward, where fixed income type products focus on capital preservation.

     

    The market current attributes most of the move towards investment products meant for capital preservation to our demographics but I don't think this is necessarily so.

     

    2 bubbles within a decade coupled with a real estate explosion have combined to make a lot of folks - perhaps a generation - much more risk averse.

     

    For you, what you should be doing, is taking risk appropriate not to your age but to your personality, so you don't make mistakes founded in emotion. If that means sticking with fixed income products as opposed to equities, then so be it. But no one on an investment website can tell you what to do without knowing a lot of personal information about you.

     

    But as Blueice says, don't let it stop you from investing, and make sure you have a long term plan....
    7 Sep 2012, 01:29 PM Reply Like
  • Zerohedge did a graph on this with the new low rates...it used to be you saved 10-15% and made 8% a year......now its only 2% or less....so you have to save 40% now...not going to happen...so in other words the youth are screwed...their vote counts..they better study hard who they vote for...the big government guy..or the business growth man....
    7 Sep 2012, 01:40 PM Reply Like
  • Appreciate the insighs Blue and KMI.

     

    I will continue to invest 100% in equities (AAPL, KO, PM, etc.)
    7 Sep 2012, 02:57 PM Reply Like
  • Do not forget the goo industry as well, Stephen!

     

    It is either, stocks, bonds, real estate or one's own business, if one wishes to grow their capital...

     

    I wish you well...!
    7 Sep 2012, 03:01 PM Reply Like
  • And to you as well.
    7 Sep 2012, 03:09 PM Reply Like
  • It could also be that investors are pulling their money out of mutual funds due to the expenses of these funds. Putting your money on the S&P 500 ETF (SPY) not only reduces your expenses but also outperforms about 80% of mutual funds.
    7 Sep 2012, 01:02 PM Reply Like
  • Chanthirani, it could be, however, there are plenty of funds with very low operating expense,,,,Vanguard, just to name one...

     

    One issue with the S&P 500, is it's over positioning of financial stocks..
    7 Sep 2012, 01:19 PM Reply Like
  • Take a look also at Chart 2 in Bill Gross' latest investment letter (http://bit.ly/QrV9mH). It looks to me like there could be some reversion, leading to a short-term injection of some money, but the question is how much, and when/if it will continue its decline trend. There are many out there that have given up on investing in equity markets and will not return anytime soon.
    7 Sep 2012, 01:11 PM Reply Like
  • Charles Biderman with TrimTabs has said that stock prices are more influenced by liquidity than value. Like prices on other items it is all about supply and demand. So where is the demand coming from to drive prices up the past 3 years? Bonds I understand but as bond prices are driven up, how are equities able to follow without the necessary demand? It certainly seems that some market fundamentals have changed.
    7 Sep 2012, 01:58 PM Reply Like
  • I feel that the surge in UVXY was an over reaction by the investor. 9400% upside only during the intraday.
    It will hit the bottom very soon.
    7 Sep 2012, 05:06 PM Reply Like
  • Surge in UVXY due to a reverse 10 for 1 split, not due to an actual surge in price. That means that for every 10 shares of UVXY that you originally own, you now have only 1 share.
    7 Sep 2012, 10:57 PM Reply Like
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