"For now, though, mixed economic data is presenting a picture of an economy that is recovering feebly from recession. "I would argue that we haven't had a recovery, if you removed stimulus (which is currently occurring) we would have been moving downward (sideways at best) in the market and the economic fundamentals. While stimulus helped the economy, it is also the reason our debt increases and that the piper will have to be paid soon. [ Read more ... ]
This blog attempts to educate people about how our economy works and to provide updates on what is going on in the economy that may affect them (See personal story at the bottom of the page). Neither this blog nor I are investment advisors, any opinions posted on this site are my own. Please seek a professional investment advisor to fit your personal investment goals.
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Sunday, August 22, 2010
Small Investors Flee the Market
An article in the NY Times yesterday discusses how small investors have pulled more than $33.12 billion out of the domestic stock market mutual funds over the first 7 months of 2010 and moving into bonds (possibly creating a massive bond bubble). This could turn out to be the biggest flight from the domestic market since the 1980's (with the exception of 2008 where investors pulled out $151.4 billion). The article points out that the difference here is that investors are pulling out of the market while shares have been rallying. A chief economist of the Investment Institute says this exodus from riskier assets is very unusual. Comment on the following excerpt from the article:
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