It is not the sheep I know. I cant imagine mutual funds are buying this high. Maybe its just the banks buying with tarp money, but most gave it back. So who is it???
Why wouldn't mutual funds be buying the market highs? They are competing with benchmarks, and if the S&P/Russell/Nasdaq etc. are moving higher, these guys will probably be buying. They can buy the highs, and be forgiven if the market subsequently tanks. If the market move up and the fund manager is on the sidelines, he will face criticism. Honestly, haven't managed mutual funds proven to be the worst market timers, as a group?
Little old ladies in china smoking a cig with one eye squinted because of the wafting smoke while they plug their IB accounts with every nickel they have. Me rika ess an pee.
ok that makes sense but dont mutual funds get the money to invest from customers, nobody I know is putting money into the market yet, certainly not in significant amounts.
individual investors as a group are probably the only worse market timers than mutual funds. Yes, funds by and large are buying or selling based on investor purchases/redemptions. Mutual funds do have various degrees of leeway in terms of how much cash they are allowed to keep.
Hyperinflation. When it hits just as unexpected to the pundits as the housing bubble popped you will see stocks being the only liferaft left to conserve capital. Especially multinantionals that have capital assets, and export to other countries (ie industrials etc.. that pay dividends) Weak dollar, more exports. Hyperinflation means debt on industrials balance sheets is eroded.
saw on cnbc the other day that funds have a stock/bonds bias of somehting like 1/10. was quoted from morningstar. I guess I don't want any bonds eh! dont know what the cash levels were though.