Another Report on Small Investors Fleeing the Stock Market
Just reported the other day on the outflows of equity funds and into bond funds that were hitting dangerous levels. The New York Times reported over the weekend about how small investors continue to make the wrong move. This time its the movement into bonds even as corporations continue to recover. Some $33B has exited equity mutual funds at a time that billions should be flowing into the funds. Fidelity also reported that the percentage of equity holdings in 401Ks is down to 57% from a historical average of around 70%. What is scary is that small investors likely consider bond funds as safe and don't understand the risk of investing in bond funds. If interest rates go up, these bond funds will drop in price. Completely different risk from investing in a bond that you plan to hold to maturity where your just accepting company risk if they were to go bankrupt. Another interesting stat is that while money flowed into stocks in March & April as the market peaked, money actu...