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Strategies & Market Trends : Moomin Valley (formerly Troll-free Zone)

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To: Moominoid who wrote (1318)	4/26/2006 8:35:47 PM
From: RealMuLan	Read Replies (1) of 2852

That article seems to imply most liquidity is from foreign investors. But that does not explain why mutual funds inflow increased so much. Because few foreign investors would buy US mutual funds. Most of them buy individual stocks. You may want to read some of the details of the Lipper report, and the observation on the last page here. funds.reuters.com They think the increase in the fund flow is due to US baby boomers, all of a sudden, starting to invest for their retirement<g>. And baby boomers are cautious so most of them choose mutual funds and that is why for the big inflow of the mutual funds. And most of these funds bought in growth stocks (this may explain why GOOG up so much in March?<g>) However, I am wondering where did those $34 billion come from? $7+ billion were from money market account, but where did the rest come from? Maybe from selling Real estate? since salary has not increased much, and the average saving rate for Americans also pretty low. Money in CD is not that easily available. If indeed most of the money are from real estate, that will be an important aspect. This is what I got from reading that news. I will be careful to short selling here. Edit, From May, Chinese individual investors can invest abroad. I read from some online poll, 14% or so people are interested in doing this. Multiply that number by the online readership, whatever that is, and then multiply $20k (that is the individual allowance for each year), you get a pretty big number. I acually read from Yahoo that some bag holders in some (Chinese) stocks are counting on the bigger fools from China to lift them<g> And this is also a good way to spend the big foreign reserve of China. This is called "Cang Hui Yu Min" (storing the foreign exchange among the Chinese people)<g>

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