The Investment Company Institute (ICI) releases weekly data regarding net inflows and outflows of investments into mutual funds, breaking these flows into equity and fixed income categories. Interesting to note that for equity funds (both US and int’l), there has been a consistent net outflow for the last three weeks of data, indicating that investors were pulling money out of equity funds and moving to fixed income. These investors are making calls as to the overall economy and the best time to be in certain asset classes…
If we just take a look at the broad US stock market index, the S&P 500 is up over 14% YTD 2012 as of 8/20. In the month of August alone, the S&P is up over 3%.
Looking at these abbreviated statistics points out the diffculty of making calls on market timing. Large institutional investors have diffculties getting it right…plus will pass along fees from all this activity down to the individual investor. Why not stock to low-cost, asset class investing using index funds?
This data is for informational purposes only; please consult with your advisor or tax professional for your individual situation. Diversification and asset allocation does not ensure a positive return or protect against a loss.