Friday, March 18, 2011

Investors Are Starting to Get Nervous About the Current Market...

Money Market Funds (MMF) Show Big Deposits This Week...
 (Re: Only One Family of Funds)

When investors get nervous about the markets they make mutual fund switches...
At the March 2009 bottom of the market investors had been switching cash from mutual funds to a  MMF... At March 2009 the MMF deposits had grown to $1.365Bil...
As the stock market advanced to higher levels since the March 2009 bottom, the amount of funds in the MMF started dropping as investors switched their cash from MMF's and put it in to other mutual funds...
When corrections occurred investors got nervous and made switches back to MMF's...
Then when the market continued it's advance investors switched back from MMF's back into mutual funds again...This occurred several times until the latest top in February 2011 while leaving the MMF with $659mil, the lowest amount since March 2009...
So for the last 23 months as the stock market catapulted up the amount of cash in the MMF ratcheted down from $1.365Bil to $659mil...
From the top in February at DJIA 12,391 to the low this week of DJIA 11,667 there was a 724 point swing...
Although the market closed today at DJIA 11,858 investor nervousness was growing and they switched from mutual funds back to the MMF...A total of $233mil was switched to the MMF from mid February 2011 and $186mil occurred this week alone...

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