A new Bank of America Merrill Lynch survey published Friday finds that US investors have pulled $79B out of equities year to date — including net outflows in 9 of the past 10 weeks — despite stock prices continuing to break new record highs.
Friday, April 24, 2015
Is this the business cycle at work .... or something else?
A new Bank of America Merrill Lynch survey published Friday finds that US investors have pulled $79B out of equities year to date — including net outflows in 9 of the past 10 weeks — despite stock prices continuing to break new record highs.
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This seems puzzling. Is this because people are afraid that they're riding another high before a crash? Could that be an explanation? It seems very bizarre that the two are so drastically different.
ReplyDeleteThat's really strange...I was hoping the article might offer some explanation for the disconnect. Could the money be moving to international markets or something like that?
ReplyDeleteI am under the impression that that maybe the disconnect is because this graph was based off a survey. Other than that, it would make sense that a correction in the market would occur in the future.
ReplyDeleteThis graph should be worrisome to the investors that are still riding the stock market up. I know we discussed the likelihood of a market correction, within a year or two in Dr. McKinney's Monetary & Fiscal Policy class. It seems from this survey $79B worth of equity investors are speculating a market correction is near. I do agree with Nolan though, I would like to see more evidence of this disconnect in further studies.
ReplyDeleteThat graph is pretty frightening. The bull market has lasted a very long time. I agree with Tyler that we are probable due for a market correction soon. The sharp decline leads me to believe that maybe they are on to something.
ReplyDeleteThis graph is baffling, somewhat scary and a little questionable. I also agree with Nolan that this could be due to the setup of the research being a survey. I also believe that the market could be predicting a future market correction. It will be interesting to see the outcome.
ReplyDeleteI have to agree with everyone that this graph is strange and hoped that it would offer more of an explanation as to why this is happening. I also am wondering if people are thinking we are riding another high before a crash as Taylor pointed out. Either way I wonder what the outcome will be.
ReplyDeleteI agree that we're due for a market correction soon. With such a large discrepancy between the rising prices and net outflows, it seems almost intuitive for a pending market correction. It also seems as if this may be the result of system wide financial engineering (including the stock buyback strategy mentioned in a different post).
ReplyDeleteI agree with the above statements. I think that if setup of this research study was different, we may have observed a different result outcome and, possibly one that may not be as hard to believe. Also, I think it would be interesting to observe whether or not we witness a future market corrections.
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