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1. will record retailers save jan effect via predetermined index flows ? 2. are professionals really pessimistic re:2026 ? 3. can we apply anything normal to a trump era?
"... the market has been driven to record height levels this year by retail investors, not institutional investors, who are sitting mostly on the sidelines according to Business Insider and Vanda Research, with the latter reporting that cumulative retail net purchases of stocks and ETFs hit the highest level in the first six months for 2025 in at least the past 10 years."
If true, that raises serious concern. Years ago it was often said that retail investors were usually "the last in and the last out." - meaning they tended to buy at tops and sell near bottoms.
Rieder and Faber discuss seasonal patterns a little bit at the start of the interview I linked elsewhere. They seem to find them both real and non-sensical. But Rieder does mention a flood of new money coming in in January among other factors that tend to bolster markets. In addition, some portfolio managers decide to lock in a good annual return by selling high-flyers in December.
Wondering how many took Div's & CG's in cash instead of reinvesting? 16 funds, 8 no, 8 yes. Remove MM, Treasury fds, RPHYX = 14 FUNDS 8 no's 6 yes Schwab account only.
This article from M* seems to paint a different picture. I don't see the article discriminating between retail and institutional investors.
Consistent with the past several months, flows favored taxable bonds, especially lower-risk areas within it, as well as international stocks over US equities. That said, US equity funds broke a six-month streak of outflows, tech sector funds posted their first outflows since April, and crypto assets lost some allure.
snip\
Taxable-bond funds continued to rake in assets in November, with 22 of 27 categories gathering assets amid a rate-cutting cycle. Their $51 billion of inflows marked a seventh straight month of inflows above $50 billion. In the past three years, total net assets in taxable-bond funds increased 38%.
snip\
US equity funds gathered a scant $3.4 billion in November, good enough to reverse a six-month streak of outflows.
Comments
If true, that raises serious concern. Years ago it was often said that retail investors were usually "the last in and the last out." - meaning they tended to buy at tops and sell near bottoms.
Rieder and Faber discuss seasonal patterns a little bit at the start of the interview I linked elsewhere. They seem to find them both real and non-sensical. But Rieder does mention a flood of new money coming in in January among other factors that tend to bolster markets. In addition, some portfolio managers decide to lock in a good annual return by selling high-flyers in December.
16 funds, 8 no, 8 yes. Remove MM, Treasury fds, RPHYX = 14 FUNDS 8 no's 6 yes
Schwab account only.