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Bob Carey
Chief Market Strategist
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  Institutional Capital is Driving the Stock Market Higher
Posted Under: Broader Stock Market
Supporting Image for Blog Post

Supporting Image for Blog Post


View from the Observation Deck

  1. The green line in the first chart shows large blocks of capital flowing into the stock market. The vast majority of said flows is institutional money.
  2. The second chart shows money flowing out of the stock market over the same time frame. The vast majority of those outflows are from retail investors executing smaller trades.
  3. While the charts only reflect trading activity since 8/11, the visual presented has been playing out since 2009. The average retail investor is fleeing stocks despite positive returns.
  4. From 3/9/09 (end of last bear market) through 2/8/12, the S&P 500 posted a cumulative total return of 112.1%, compared to 12.3% for the Barclay's Capital U.S. Treasury: Intermediate Index.
  5. From 2009-2011, equity mutual funds reported net redemptions totaling $175.8 billion, compared to net inflows totaling $742.1 billion for bond mutual funds. (Source: ICI.org)
Posted on Friday, February 10, 2012 @ 9:38 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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