THE PRAGMATIC CAPITALIST » » SMALL INVESTORS ARE PILING INTO STOCKS

SMALL INVESTORS ARE PILING INTO STOCKS

11 June 2009 by TPC 2 Comments

Small investors are knocking eachother down trying to get into equity mutual funds as the rally picks up momentum. Equity funds added a sizable $13.6B for the week ended May 3rd after adding $4.63B the previous week. As we pointed out before, small investors have timed this market wrong at just about every juncture. The fact that they’re piling into stocks right now can’t make the smart money feel good about their bets….

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2 Comments »

Jay (marketfolly) said:

uh oh, time to get out of the markets. after all, the ‘retail crowd’ in masses are always the worst investors… buying at the tops and selling at the bottoms. Abandon ship!

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# 11 June 2009 at 11:01 AM

Jimmy T said:

Well we cannot say that all of them got it wrong. Between April and May, the US markets advanced nearly 20%, and a large part of the mutual fund inflows in April and May also went to emerging markets long funds. Going by performances of equity indices in April and May, they have not done badly. The performances of the markets going forward and when the new funds plan on exiting is another matter.