Retail customers stream into bonds, avoid stocks
Some interesting trends from the trenches. It's been no secret that retail investors have fled the stock market over the past year. Some people blame the May 6 Flash Crash; others see the market as rigged somehow. And some say they are just being defensive, given the lack of the long-term growth in the market. The issue is whether this is going to last.
The S&P 500 rose over 10 percent in the third quarter, but retail investors were still net sellers of stock mutual funds during every week of the third quarter, according to CNNMoney. If the market gains continue, you would expect investors to come streaming back, as they have in the past. But we'll have to wait and see. This is not necessarily a lost opportunity.
Retail customers plowed nearly $90 billion into bond mutual funds. There are also signs that customers are more willing to invest in nontraditional assets like gold and other commodities. They may also want to put their money with the perceived smart money; individual allocations to hedge funds has also been rising. The public's opinion of the street and market structure will be interesting to watch going forward in this season of market reform.
For more:
- here's the article
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