Are people missing a great opportunity to buy stocks?
First they fled bonds. Now, investors appear to be fleeing stocks.
According to the latest Thomson Reuters Lipper data, investors pulled $5.1 billion out of stock funds last week. That marks the third straight week of net withdrawals from U.S. stocks.
Clearly all the taper talk and Syria saber-rattling has investors running for the hills, and now they face a tough choice: stocks, bonds or cash?
“The ‘Great Rotation’ is more like the Great Pumpkin: It has failed to show up,” said Brian Kelly of Brian Kelly Capital. “If the Federal Reserve is unsure about economic growth, and they are the so-called experts, then how is the average investor expected to be better at interpreting the data?”
So far, the interpretation appears to be that they should keep their money in cash, as fears about Syria, the Fed, and the debt ceiling continue to hang over the market.
“Investors are heavily in cash, and have no idea what to do with it,” said Zachery Karabell of RiverTwice Research.
Still, after a rough pullback, the S&P has appeared to have found a floor – rallying some 2.5 percent off its recent lows in late August. This begs the question: Are people missing a great opportunity to buy stocks?
Watch the video above to see if the charts offer any clues.