Stock market "exodus" as the reporter calls it. Market exit of $44billion in 5 weeks

Investors moving into bonds and metals recently. It appears that "sell in May and go away" is starting to come to fruition.

Ending of a bull market? Shoring up investments for the presidential election & policies that will follow? Seasonal protectionist strategies? All of the above?

My question is - they account for 3.5bil to bonds, 1bil to metals, 11bil into money market. Where's the other 30 billion going?

I feel like Nostradamus today. We'll see if I was also a fraud soon as well. (Or maybe just a bit educated and mostly lucky)

http://finance.yahoo.com/news/baml-equity-fund-flows-exodus-142921175.html

The cumulative outflow from equity funds over the past five weeks was $44 billion. BAML's Michael Hartnett, who characterized this as an "equity exodus," noted that this was the largest redemption over a 5-week period since August 2011.
So where is that money going?

In the past week, $3.5 billion went into bond funds and $1.0 billion went into precious metals funds, which offer exposure to gold. There was also $10.9 billion poured into money market funds, the largest inflow in 13 weeks.

 

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I think that a truncated version from marketwatch
http://www.marketwatch.com/story/the-equity-exodus-by-investors-is-getting-worse-2016-05-13

 

I don't know enough to understand the market, despite all my efforts to research. Having said that, I've been waiting on a market correction for a while.

 

Maybe they should change T.I.N.A: There is no alternative, to Tony meets Joe.

 

I do listen to the BBC market report but it's always truncated so this is kind of shooting blanks...Could this have something to do with the meeting in London over the Panama Papers? I mean, is it possible brokers and financial advisors are telling their clients to get out before it's too late and put their money elsewhere before they are found out about their off shore safe haven holdings? There is something to the election theory but how much of this I don't know either.

 

I did listen to a business radio discussion an ongoing trend of people moving towards large funds and doing less trading on individual funds.

 

This could be part of it, I think it's just that the DOW has been going sideways for the last 2 years. I got out last year at this time while it was at 18.4k and it has languished for over a year in a 2000k range - all downward of the all time high.

Today it's at 17.5k or there-abouts. We're showing over a year of downturn - and going into May, the election year with a lame duck president.

I said it last year - turmoil is coming. I could be wrong, but I've bet that I'm not. I'm very long on metals, and I'm in strong cash positions - ready to buy back into the market after the correction.

 

This might seem a bit weird but my best friend has had these "feelings" or "premonitions", call them what you will and aside from political, that ( something ) is coming our way in Sept. We are living in precarious times for sure.

 

I started a $100 K Stock Market Portfolio about 6 months ago. It has since advanced to $128 K. I keep a large percentage in cash. Most of the gains are from gold and silver mining stocks performing in double digits. I took profits on many of these the other day and moved to cash still retaining some. Other non gold or silver related have languished or lost money. I immediately sell ones starting to get -10% in the red or more. For my coin investments I simply buy what I can low, then sell it high. At shows I setup at I only buy what I can sell now and make money on. My main buying season on ebay is coming up: The Summer Doldrums.

 

When a great majority of your stocks and bonds are tied up in your 401k, you just have to keep your fingers crossed and wait it out. I try and stay in mutual funds and away from individual stocks. At my age, I'm already taking my required sum out every year. To take out more would become a tax burden. So you wait it out and ride the wave. Am I a gambler? Yes. I guess that's why I collect casino chips as well. :>)

 

September and October in an election year are always interesting for the markets. Ever heard the phrase "October surprise"?

 

TINA is closely related to "Miss Rosy Scenario", the famous dame from the 1980's who reappeared after the "Great Recession" with the "green shoots" and current on-going economic "recovery", the weakest ever.

Most of TINA is a reflection of moral hazard, "reaching for yield" and financial intermediation. Government creates moral hazard through acting as "lender of last resort", the Greenspan/Bernanke/Yellen put and various insurance and guarantee schemes, such as FDIC deposit insurance and mortgage guarantees. Most financial assets are managed by intermediaries who are lot more worried about underperforming their benchmarks than prudently managing their clients money.

Combined with government induced moral hazard, this is how financial professionals can rationalize recklessly managing most everyone's money. In the Bizarro world government has created, it has actually made sense to buy and continue to hold historically absurdly overpriced assets even with leverage.

As a professional money manager, in a bull market if you underperform your peers, your clients move to your competitors. In a bear market, they will either leave anyway or switch to asset classes (like MMMF) with lower fees. So they might as well get as much as they can while the going is good. Additionally, if they are wrong and lose most of someone's money, they can still claim they were prudent because most of their peers are doing exactly the same thing.

 

Someone should also mention that an "exodus" is a great opportunity for a long-term investor to buy.

 

Not true, you can move between funds in most cases. I move between stock funds, bond funds and money market. I review every 30 days and make moves based on market sentiment while protecting gains.

I'm about 70% money market and bonds right now - and any more breaks in the next month above 18k and I'm getting the rest out.

Meanwhile, ready to move back in after correction.

 

My company ( Becton Dickinson- Fortune 500 ) that I worked for allowed us to control our own funds. We were able to change our positions percentage wise back and forth as we saw fit in able to better control market fluctuations. The outcome, of course, was knowing and following the market to the best of each of our knowledge of how they were working. We could make good or bad moves but at least we had some control. We also had control of which funds to deal with, large cap, small cap, mid cap, company stock, international funds, etc. I would read the Wall Street Journal religiously. I did pretty well overall, losing a little here and there but mostly gaining ground throughout. It's not for the faint of heart though and requires a lot of study and timing.