Thursday, January 5, 2012

Investment banks trading amongst themselves as retail pulls out more money from markets

2011 ended with retail investors pulling out more than $140 billion from the markets, leaving volumes low, and most trading occurring between investment banks.

The Santa rally into the year end was taken good advantage of by retail America. As ICI reports, in the week ending December 28, investors pulled another $3.988 billion out of domestic equity mutual funds (and $1.2 billion out of foreign equtiy funds). This represents the 19th consecutive outflow since a tiny inflow in mid-August, which if excluded would mean 36 consecutive weeks of outflows beginning in late April, or roughly the time when the market peaked. Altogether a whopping $140 billion has been redeemed from domestic equity-focused mutual funds, which compares to "only" $98 billion in 2010. - Zerohedge

While the markets have a long way to go to divest the more than $14 trillion in mutual funds and IRA's, many people who chose the stock markets as their retirement avenue are reading the writings on the wall, and figure its better to be first, than to be someone trying to catch a falling knife.


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