Attached is the weekly Lipper chart from Barrons called cash track. It shows four charts for fund flows - equity funds, money market funds, municipal bond funds and taxable bond funds. Keep in mind that each of the charts are four week moving averages.
Equity funds have significantly reduced the out flows. This appears to be investors getting a little more comfortable jumping back in. Possibly, this could be what has been driving the market back up.
Municipal funds are a little behind the movement in equity funds. The outflow is not increasing the rate of redemptions, but slowing.
Taxable bond funds are pretty much what the same as municipal funds.
In the money market space, the ever increasing rush into money markets is slowing its increase.
I'm still in the camp that this is a bear market rally. The economic metrics and company earnings in the coming weeks are likely to reduce the newfound enthusiasm. For a few weeks, markets seemed to totally lose all their moorings. Great companies were dumped along with everything else. It was a great “sale”. Sure those quality companies will have their challenges, but they have the financial strength to withstand "rough seas". It seems most of those companies have regained their footing.
I think it's likely that we are going to see another period of widespread selling. Keep your eyes on the fundamentals of your holdings. Quality companies with solid dividend records, reasonable leverage and long histories of earnings are a great place to weather this unpredicable storm.
Stay safe.
Be smart, be well-read and be successful.
