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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (50582)	8/18/2002 8:24:45 PM
From: John Madarasz	Respond to of 209892

i don't think i'm qualified enough to answer that with any confidence. sorry

To: NOW who wrote (50582)	8/18/2002 8:30:59 PM
From: John Madarasz	Read Replies (1) \| Respond to of 209892

8/5/02 NEW SAVINGS FLOW RUNNING 33% BELOW EARLY 2001 PACE. Mutual fund inflows over the first seven months of 2002 were $97 billion vs. $101 billion over the same seven months of 2001. However, almost all but $6 billion of this year's new money went into bond funds, whereas last year, $47 billion went into equities. US equity funds had a zero net inflow after including July's $47 billion outflow estimate vs. a $60 billion inflow last year. Bond funds gained $91 billion in new cash January through July this year vs. a seven month gain of $54 billion in 2001. As we have been saying, individuals apparently have abandoned the stock market and are unlikely to return until after the market has rallied for at least several months and perhaps as much as 20%. Those assumptions are based upon what has happened in the past - particularly 1988 and 1995. We reported on what happened in 1988 above. In November 1994, the stock market bottomed. Inflows did not dramatically improve until July 1995. Overall savings flows were down by 1/3 the first seven months of this year vs. 2001. The two categories with more rapid growth are bond funds and saving accounts. Bank saving accounts flows - the safest of the safe since they are guaranteed by Uncle Sam - grew by 18% to $242 billion of new cash so far this year. Money market funds gained just $23 billion in assets this year down 50% from last year. Most of that gain was in July when investors bailed from equity funds. Our guess is most of the outflow went either into bond funds or money markets. Most of the new savings generated by the US economy is going into banks. Small Certificates of Deposit are losing assets due to sticker shock as they mature. Rather than tie up funds for a lengthy period of time at less than 2%, bank savings accounts at the same low pay-out seems preferable. trimtabs.com fwiw