Why you should worry about the flood of new cash into U.S. stock funds MarketWatch 1 hr ago
MARK HULBERT
U.S. stock funds now are riding a river of new cash from investors and that is not a bullish sign.
Many investors might see this differently that a huge influx of cash is positive. In fact, fund flows are a contrarian indicator: the U.S. stock market in the past has performed better when there is a net outflow of cash.
The evidence is summarized in the chart below, which plots net inflows of cash to U.S. stock funds (both open-end and exchange-traded funds) by year over the past decade. Notice that in all but two of the years since 2010 there have been net outflows.
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