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Strategies & Market Trends : Waiting for the big Kahuna

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To: Death Sphincter who wrote (20118)6/12/1998 8:14:00 AM
From: Tommaso  Read Replies (1) of 94695
 
Because the percentage of cash in mutual funds stays about the same (having steadily got lower for several years), it seems reasonable to assume that each time additional cash flows into funds it is put into the market pretty quickly. Of course with thousands of funds that all have slightly differing policies, it's hard to know muc more than that.

In any case, net cash flow into the funds certainly does reflect continuing confidence of people with money to commit, whether they are big investors, little investors, domestic investors, or foreign investors. The amounts are not very large in terms of the total value of U. S. equities, but as long as demand is there, it will push the market up or at least hold it steady.

The slightest loss of confidence, with an effort to pull money out, would lead to huge declines.
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