Taking Their Investments Elsewhere The Treasury on Tuesday released its estimates of international capital flows into and out of the United States, and they indicate that foreigners were net sellers of $40.2 billion of American stocks in 2013.That is hardly a large amount, but it is the first year since 1992 that they were net sellers. Historically, foreigners have been considered to be contrary indicators in almost every stock market around the world, on the theory that they are less familiar with the market than are local investors, and more likely to buy at the top, after prices have been bid up to levels that could be unsustainable, and to sell at the bottom, after the local investors have fled, sending prices down. The two years with the largest inflows of foreign money into American stocks were 2000 and 2007 â both years that the market hit historic peaks and began large declines. That would seem to confirm the theory. Perhaps the explanation lies in a broader context. During the 1980s and early 1990s, there was widespread pessimism regarding the ability of the United States to compete with Japan, the rising economic power of that era. That pessimism proved to be unfounded, but it made investors nervous. In the current era, there is worry that the United States cannot compete with the Chinese, and to a lesser extent with other emerging Asian economies. Perhaps the 2013 selling reflected pessimism about the countryâs future, coupled with concern over the countryâs ability to govern itself. The heaviest selling came during the summer, amid talk of a government shutdown or default, and during the last two months of the year, after the partial shutdown occurred in October. --------------- Interesting.