It will soon be a brand new year. Throw out the old and bring in the new.
The last several weeks in the stock market have been tumultuous to say the least. The paralysis of the federal government is the latest negative event. Does anything ever get done in the "bubble" of Washington other than politicians "flapping their jaws"?
On the plus side, the market has dropped significantly creating "sales" in the equities space. That said, a lot of securities were way over priced for a long time and deserve to come down "off high". The general market fall has brought out some great values, but you have to look closely. Just because a stock is down, doesn't mean it is a great buy. You have to look closely and evaluate the fundamentals of companies you are interested in, but they are out there.
Attached is a graph from Lipper showing recent mutual fund flows. It provides a great deal of information on the sentiment of the general populace of investors. In my mind, it clearly shows the fears of the average investor and when fear is high, it can be a great time for those who "keep their head about them" to snap up some deals.
Mutual funds were once a long term investment vehicle. Now days, they are often treated as trading vehicles.
The flows into equity mutual funds were positive in November and were followed by a continuous heavy outflow in December. Muni bond and corporate bond funds have also seen heavy outflows too, while money market funds have been increasing at a fast rate.
Open your eyes and look closely. You might find some nice "nuggets" in the ruins.
