About Those Retail Investor Fund Flows

Tyler Durden's picture

While the developed world's central banks may enjoy trading FX and stocks, either directly or indirectly, with each other in a demonstration of monetary policy "stability", the historically biggest source of capital inflows into stocks - the retail investor - has once again just said "nein", for the 17th consecutive week, and excluding tiny inflows of $95 million in the week of July 18 and $907 million in the week ended May 30, has pulled money from stocks for an unprecedented 39 consecutive weeks, with $6.6 billion pulled out in the last week, the most since the first week of October. In fact going back to the beginning of 2010, according to ICI, while $44.5 billion has been invested into domestic equity stock funds, $412 billion has been pulled out. Where has the money gone on an almost dollar for dollar basis: bonds, confirming that the New Normal mantra is all about return of capital.

And no, it was not always like this.

So while banks are using the record cash deposited with them (as we reported several days ago), as well as the tens of billions in excess reserve capital inflow each month from the Fed to ramp stocks higher, the US investors no longer cares about promises by TV talking heads to "shift money out of bonds and into stocks now, because it is a once in a lifetime opportunity to do so", or that money in the bank is worthless under ZIRP so buy 300x P/E money losing retailers, or that the DJIA can go to 36,000. The US investor is simply done with the stock market.

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Quinvarius's picture

Bullish.  You know it is.

archon's picture

Bearish - The entire recession/ depression sicne 2008 IS the next big bubble.

The trend is your friend's picture

Will retail get the last laugh cuz they are too scared to lose even a dime more in equities or are they being prepared to be fleeced as they move deeper into the bond market? 

midtowng's picture

so who is it that is buying stocks?

CPL's picture

Bond sales are up

Equities are in outflow

Markets go up.


If you are catching up anyone holding bonds is just as fucked as anyone holding equities in the termediate term before someone pulls the PM trigger.  Then, like holders of any USD backed paper...well, the poor fucks won't know what him them.


Bonds ARE what's buying the market. 

Boilermaker's picture

Like it even matters.

Please, give it a rest.  The retail investor has nothing to do with this anymore.

JPM Hater001's picture

Remember that 401K is a huge investment item for the worker bee.

401K's generally only offer Mutual Funds (and perhaps the employing companies stock if public)

There are fewer worker bees.

ebworthen's picture

The Treasury Department and CONgress are salivating over all those 401K's and IRA's people think are theirs.

JPM Hater001's picture

The US investor is simply done with the stock market.

I'm not done.  I'm just not long.

mac768's picture

Fool me once, shame on you

Fool me twice, shame on me...

You were so easy to believe.......

vinayjha's picture

the way central banker are printing it will take 36k and them boom 2k.

bubble will explode.


Winston Churchill's picture

Return of capital in the bond market ?

Good luck with that,learnt a painful lesson about that back in the 1970's.

Bank of mattres is the only safe place now,plus planting PM's in the  garden.

DavidC's picture

There was some questioning the other day about savings levels rising slightly. I reckon that's precisely why.


VonManstein's picture

Could this be a bullish contra indicator? Whats all that money gonna do when inflation starts going mental? or the TPTB ramp us to new highs convincing all to re enter the stock market for profit or safety? That will really blow market skyward and TPTB will cash out into strength.

Not saying this is the deal but its worth considering, retail been selling for years and the market is still going up.

Just a thought.

Sold DAX today though @7300 looks a bit fragile up there :)

DavidC's picture

Maybe retail knows, at an empirical level, what's really going on.

Would YOU invest in a market, the level of which is only there because of pumping (in its various forms)? I wouldn't, in the same way I told friends not to invest in property in 2006 (yes, I know it's only anecdotal, but it's also true).


fonzannoon's picture

There are still some retail Buffet followers around. I think, even if every single retail investor left the market, 85 billion a month being dumped in should be enough to keep the game going. If not, maye it 150 bil, and up and up and up.

buzzsaw99's picture

stocks are just a way for corp. execs and billionaire hedge funds to rob the people. the only difference is that now the word is out on those maggots.

wstrub's picture

"shock and awe" will work.......devalue the currency in one fell swoop.................scare the money off the sidelines............put the fear out there that there may be further devaluations coming down the road...................investors will then be too frightened to keep their money in cash.  Voila.......velocity returns!


Winston Churchill's picture

Its only zero velocity stopping hyperinflation.

Be careful what you wish for....

Never One Roach's picture

The 8-10% inflation is already devaluing the currency, but at a slower pace then "one fell swoop."


Loss of 8-10% purchasing power each year is more painful for some then others, esp when you see the retirees getting a COLA of 1.6%.


Kreditanstalt's picture

"Done with the stock market"...yes, but they're lemming-like idiots too.

You don't HAVE to buy AAPL, BAC, FB or retailers.  Try miners: one days oon they will revert to their usual countercyclicality.

"Bonds"?  Anyone putting money into bonds is either waiting for a price collapse (corporate) or likes losing via inflation (government).

Or both. 

There has to be a penalty somewhere for risk aversion, you lemmings.  It's only JUST.

ekm's picture

Do you understand now why market can only either creep up or crater to the bottom of the ocean?

It's called FORCED BUYING.

Yen Cross's picture

 The only way you can trade this "news driven" irrational shell game, is to be a " human algo"...

You need to be glued to a trading platform 24-7, or you will get taken out to the woodshed...

 Trying to use stops on trades is futile... You will be seeked out and destroyed...

ekm's picture

For sure.

You have the capability and intent to hold inventory for 1 minute or 10 minutes or 1 hour.

They don't.


However, they function because you trade. If you and others just simply dissapeared for few days, HFT would be all dead.


Eric Hunsader told Lauren Lyster that the HFT big cahunas have gone to Australia to ask the exchange authority there to promote multiple exchanges. He has advised australians to say no. HFT can exist only if multiple exchanges are available.

Yen Cross's picture

  EKM,  the ASX200 is an absolute joke! That market takes a close second to the DAX... was it you or Fonz that posted that awesome video on (HFT)... I will dig it up... You've probably already seen it...  You are well ahead of me on all things (HFT)...

ekm's picture

Not me.

If you find it, please post the link.

Yen Cross's picture

 Consider it done... Might take a bit of time though...  I wonder if Fonz is still online? He probably has it book-marked.

  One way or another I'll track it down.

ekm's picture

Thx a lot.

Youtube and facebook and others are blocked here at work, but I'll watch it at home.

Yen Cross's picture

 You're the man Fonz!  Thanks V/M!

Hope I didn't mess with your dinner time in N.Y. .  I owe ya one...

fonzannoon's picture

Anytime guys. enjoy. funny the one i originally sent Yen had a lot of hits. this one had like 500. weird. but it looks like the full video. have a good weekend.

Yen Cross's picture

 Fonz the origional link you gave me came from a(HFT) post that was well Written by Tyler... Who are you using to track the(link) hits?

  Are you just looking at the generic youtube chart?

fonzannoon's picture

Generic youtube chart. I got that vid sent to me from a buddy. I saw a whole lot more hits when I watched it. I could not find his email so I did a youtube search and that was the only one I could find. I just wonder if the original was removed. No biggie, it seems like it's the same vid.

MillionDollarBoner_'s picture

That was awesome!!!

Thank you! Its not often in this jaded world that you get to hear truth spoken without agenda.

ekm's picture

super hyper outstanding

swissaustrian's picture

Retail has always been wrong, always will be. Not to say that there are superior assets compared to stocks.

But retail is pouring into bonds, that's the other side of the coin.

ekm's picture

Correct and Incorrect simultaneously.


Retail is out because most of them are about to be retired or already retired and have already lost a lot of money.

They have no more money. They'd love to come back to the casino, but they simply have no more money since whatever they have is needed to pay for their miserable lives under obamacare.

ebworthen's picture

It's going to pick up too, as most know that captial gains taxes will be ramped up to at least 25% by CONgress.

Also, anyone with an estate knows that the "death tax" of 50% will be re-instated for ANY amount of estate (currently no tax if below $5 million).

Therefore, cash out and gift your kids and grandkids $10K now and next year and so on.

Washington and Wall Street are after your money; cash out now or get it hard and unlubricated later.

Yen Cross's picture

 Great, give the indoctrinated "entitlement" youth $10k every year from the womb...  better check your spam box ebworthen.  It's full of iOffers.

   I'm just being facetious... I absolutely hear you, and know where you are coming from...

The little pricks don't get a dime until they complete school, and are 25 years old... (family trust)

ebworthen's picture

Ditto.  I've been debating 30 or 35 years old.

Lock it up until they have a clue and won't blow it on a new Hyundai Elantra, iPhone, iPad, and Black Friday shopping.

Let them change some diapers and pay some real taxes before they get that "free" money.

PlausibleDenial's picture

The 10K is now 13K.  Use a Family limited partnership (FLP) and discount the gift thus increasing the amount you can gift.  Incidentally, since you are gifiting LP interest you still control the asset as the GP. 

razorthin's picture

Another 401K washout when the bond bubble pops.

Papasmurf's picture

To have capital return to the markets, first you have to return the captial.

ThanksIwillHaveAnother's picture

The amount of non-retail money must be extraordinary.  But how many players are there?  This is a disaster for stock market liquidity. 

resurger's picture

yeah! Am done! Fuck the ponzi