<--OT-->Mind over Matter.
You are not worried are you????? If you are check this out,hope it'll
be of some consolation.
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NEW YORK (CBS.MW) -- August was the first month in eight years that investors redeemed shares in U.S. stock mutual funds.
So is that sufficient to spook a growth fund manager?
No, says Jeff New, who manages Van Kampen's Enterprise Growth Fund (ACENX). While many investors started heading for the exits when the U.S. market posted steep declines recently, New stuck to his philosophy of mind over market.
Last month, there was an outflow of $5.4 billion from equity funds, according to Trim Tabs, a California-based research firm. As a percentage of assets held in equity funds, which totaled about $2.8 trillion at the end of July, that figure is relatively insignificant, says Carl Wittnebert, director of research at Trim Tabs.
"What that number says is that August was the first month in which investors stopped putting large amounts of new money into equity funds," Wittnebert said. Investors infused an average of $20.8 billion a month into funds between January and July.
New at Van Kampen offers some basic advice that investors might heed, especially in light of reports that hedge fund losses are endangering large financial institutions aroun the world.
"Selling when the market drops is usually an emotional decision, and emotional decisions are usually wrong in the investment world," New says. "The most common mistake is that people get scared out of the market," he says.
Investors still believe in equities
While some portfolio managers have to sell stocks to meet redemptions, which could cause further market declines, New says he believes individual investors are acting differently these days.
For the past couple of years, it's been a sound strategy to use a decline in price as a buying opportunity, New says. Also, what he calls "money on automatic pilot," such as 401k plans and other regular cash infusions, have helped support the market and cushion declines. Individual investors are convinced, he says, that long-term the stock market is still the best investment vehicle for generating money to pay for college and retirement..
cbs.marketwatch.com |
