hi Art,
So your conclusion then must be that there isn't all that much money waiting to come back into the market. It's already invested elsewhere, whether in Treasuries or in low risk equities with dividends well covered by earnings.
well, first of all, it's not in Treasuries, at least T-bills, because those cash figures i gave you last time are "cash equivalents" that include T-bills. and the only significant buying of longer-maturity govies is in "balanced" funds, which are not a huge part of the mutual fund arena anyway.
and i don't think most of the money has gone to "low risk equities with dividends well covered by earnings". first of all, if one excludes REITs, there aren't many stocks that fit your category, which is reflected in the paltry dividend yield on the SPX.
no, what i believe institutional money has been doing is the same thing many retail investors have been doing: fighting the last war. that means they have been overweight techs throughout the downtrend.
as evidence, tech stocks make up around 27.5% of the $1BILLION+ growth funds' holdings according to Morningstar, whereas tech only has a 15% weighting in the SPX. so obviously, there are a lot of funds engaged in beta-parking in a crowded trade (tech), with results that are unsurprisingly bad. |
