Last quarter, bond funds outsold stock funds. Bond funds had their largest net flows in at least 11 years. Investors seem to have given up on the idea of owning a piece of America and would rather opt for security, or at least the apparent security of owning bonds with interest rates at 40-year lows.
On the other hand, one of the experts quoted in the article says, “The retail mutual-fund investor is the worst market-timer known to mankind.” Maybe there are worse market timers, but the Dalbar data shows pretty clearly that retail investors don’t do too well. The love being showered on the bond market right now might turn out to be good news for the stock market in the near future.
Posted by Mike Moody 
