There's another sign that investors' confidence is returning: Last month they added money to U.S. stock mutual funds at the fastest clip in seven years. The year-opening surge also marked the first time in nine months that investors added more than they withdrew.
All told, investors deposited a net $21.4 billion to U.S. stock funds in January, the biggest monthly increase since a net inflow of $23 billion in February 2004, industry consultant Strategic Insight said Friday.
Last month's result also snapped a string of net withdrawals that began last May. The last time there was a positive inflow of cash into domestic stock funds was April, when a net $11 billion came in.
Investors soon reversed course after the stock market's May 6 "flash crash" single-day plunge. Fears about Europe's government debt crisis also peaked that month.
But the stock market has now risen five consecutive months, and the Standard & Poor's 500 index is up about 26 percent since Sept. 1. Fourth-quarter earnings reports have largely been positive, and most economic indicators suggest the recovery is gaining momentum. (more)
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