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To: UnBelievable who wrote (71245)	2/23/2001 5:30:15 PM
From: Andrew G.	Read Replies (1) \| Respond to of 436258

"Stocks don't rise on mutual fund inflows... they rise on soaring expectations." These are the words of expert Jim Stack: bearmarketcentral.com "Stocks don't rise on mutual fund inflows... they rise on soaring expectations. For every $1 that goes into a mutual fund and the fund invests in a stock, someone else must sell that $1 of stock. Money doesn't flow "into" or "out of" the market except in the case of new issues, secondary offerings, or cash takeovers. Money flows through the market - and it's rising or falling expectations that drive stock prices. Proof lies in historical fact. The chart below shows the cumulative inflows into equity mutual funds over this past bull market - a total of $1,287 billion. It also shows how much the market has increased in capitalization - $10,711 billion. It's a fallacy to think that $1,287 billion created the entire $10,711 billion increase in stock value. The majority of that increase came in rising valuations fueled by soaring expectations. * Need more proof? Just step back to the 1969-70 bear market that ended the Go-Go Fund hey-days of the 1960's. Every step of that 18-month bear market saw net inflows "into" mutual funds... right up until the final month of the bottom. So, can a bear market unfold with all the money flowing into mutual funds today? Absolutely!"