Tags: investors | fund | bonds | stocks

Investors Shift to Bonds From Stocks

By    |   Thursday, 22 May 2014 01:07 PM

This year was supposed to see the "Great Rotation" from bonds to stocks. Apparently it's the other way around.

U.S. long-term stock mutual funds saw an outflow of $8.2 billion in the three weeks ended May 14, according to the Investment Company Institute. This compares with net inflows of $4.1 billion in the three-week period ended April 23.

Meanwhile, bond funds enjoyed a $10.4 billion inflow during the most recent three-week period. Bond funds have registered a net inflow every month this year except January.

Editor's Note:
These 38 Investments Have a 96% Win Rate


While the S&P 500 stands within 1 percent of its record high, it has returned only 2.95 percent so far this year, compared with 7.19 percent for the Barclays 10-to-20-Year Treasury Index.

"Investors' fear over the equity market has not faded from the [2008-09 financial] crisis," Brian Rehling, chief fixed income strategist at Wells Fargo Advisors, told CNNMoney. "That may need a generation to pass."

The CNNMoney Fear & Greed Index registered 25 Wednesday, indicating "extreme fear." A year ago the index was at 89, showing "extreme greed."

Rehling's advice to investors: "stay the course, stay well diversified. When you do get pullbacks, take advantage and move cash off the sidelines."

Some experts are worried that the recent decline in bond yields — the 10-year Treasury yield hit a 6 ½-month low of 2.47 percent last week — bodes ill for the economy.

But Citigroup's chief equity strategist Tobias Levkovich isn't among them.

"We think [the reason for falling yields is] pretty technical," he told Yahoo. "Look at jobs, auto sales, planned capital expenditures. None of that is indicative of something ominous in the economic data." Non-farm payrolls rose 288,000 in April, the biggest increase in two years.

Editor's Note: These 38 Investments Have a 96% Win Rate

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InvestingAnalysis
This year was supposed to see the "Great Rotation" from bonds to stocks. Apparently it's the other way around.
investors, fund, bonds, stocks
303
2014-07-22
Thursday, 22 May 2014 01:07 PM
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