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Record S&P 500 Failing To Stem Steadiest Fund Outflow Since 2009
I have been slowly rotating out of US stock funds into domestic balanced funds. Keeping most of foreign stock fund holdings. Putting a bit more to work in international bonds.
Call me dumb. But, how can stocks keep rising if there are more sellers than buyers? Elephant chasing his tail? Maybe smaller (fund) investors are selling while the bigger investors are still buying. But if that's the case, it's contrary to conventional wisdom which says smaller investors chase hot markets longer than the big "smart money" does.
@shostakovich, would you care to mention some international bond funds you are considering? I own a small position in PFODX, but sold out of the 3 Templeton funds a few years back.
Markets climb a wall of worry only if there's more buying than selling taking place. Right? From article: "Biggest U.S. stock ETF on pace for fourth month of withdrawals"
This article appears to say that not only are ETF flows net-negative, but also that the outflows are at the "steadiest" pace since the end of the '07-'09 bear market. So what accounts for the continued rise in equity prices? Has the law of supply and demand been repealed?
Only vaguely familiar with ETFs - but I know they are used both by individual investors and also held in substantial quantities within actively managed and passive mutual funds. Looking over some of my fund reports, it does seem a number of active managers have been raising cash in recent months. Might this help account for the ETF outflows?
Still doesn't answer the question of what's supporting the market? I'm not trying to convince anyone to sell their equities or funds - nor do I think Ted linked the article with that intent.
@carew388: Missed your question from back in July -- FWIW (since so much has changed since then). I use Templeton Global Bond, and TROW's offerings (mostly because of where I have other monies and employer plans). Not a maven by any means. Also looking at the new(ish) Dodge and Cox offering. I am expecting volatility with any of these and am purposely trying to leverage that in my portfolio.
As of this writing I am also putting some money in cash given recent events and my desire to avoid getting burned in a draw down (willing to foresake another 3% of returns; yes I know that timing the markets is a fools errand, but I'm willing to look a bit foolish at the moment...).
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@shosty, domestic balanced funds have lots of US stocks, right?
From article: "Biggest U.S. stock ETF on pace for fourth month of withdrawals"
This article appears to say that not only are ETF flows net-negative, but also that the outflows are at the "steadiest" pace since the end of the '07-'09 bear market. So what accounts for the continued rise in equity prices? Has the law of supply and demand been repealed?
Only vaguely familiar with ETFs - but I know they are used both by individual investors and also held in substantial quantities within actively managed and passive mutual funds. Looking over some of my fund reports, it does seem a number of active managers have been raising cash in recent months. Might this help account for the ETF outflows?
Still doesn't answer the question of what's supporting the market? I'm not trying to convince anyone to sell their equities or funds - nor do I think Ted linked the article with that intent.
As of this writing I am also putting some money in cash given recent events and my desire to avoid getting burned in a draw down (willing to foresake another 3% of returns; yes I know that timing the markets is a fools errand, but I'm willing to look a bit foolish at the moment...).