Investor flight from stock funds accelerates
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Small investors couldn’t seem to get out of stocks fast enough last week as the market was plunging.
In the week ended Aug. 10, individual investors yanked money out of stock mutual funds at the fastest pace since the dark days of the global financial crisis almost three years ago.
The selling came as the Dow Jones industrial average sank sharply following the downgrade of U.S. debt by Standard & Poor’s Corp. Investors also were spooked by fears of a potential double-dip recession hitting the world economy.
Investors withdrew a net $30 billion from stock funds in the week ended Aug. 10, including $23.5 billion from funds holding U.S. stocks, according to data released by the Investment Company Institute. That followed $13 billion in outflows the prior week, including $10.5 billion from U.S. funds.
The selling continued a trend that’s been in place for more than four years, as many investors seem to be souring on the long-term prospects for equities.
The Dow is down nearly 11% from its recent peak in late April.
-- Walter Hamilton