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Investors shift from stocks to bonds. What does this mean?

Asked by Steve_A (5120points) August 22nd, 2010

Picked up the New York times today for a quick read, and there is apparently and I will quote pieces so I accurately share with you what caught my interest the most in relation to my question.

“Investors pulled 19.1 billion from domestic equity funds in May, the largest outflow since the height of the financial crisis in October 2008.”

“Over all,investors pulled $151.4 billion out of stock market mutual funds in 2008.”

“The stock market rose 7 percent last month as corporate profits began rebounding,but even that increase was not enough to tempt ordinary investors. Instead, they withdrew $14.67 billion from domestic stock market mutual funds in July, according to the investment institute’s estimates, the third straight month of withdrawals.”

“As investors pulled billions out of stocks,they plowed $185.31 billion into bond mutual funds in the first seven months of this year and total bond fund investments for the year are on track to approach the record set in 2009.”

1)What is your opinion on this?
2)Will there be a bubble in bonds because of this?
3)Is this showing a physiological change of people and their money hoping to keep it safer in bonds versus the volatile market?
4)Will stock value investors pick up on this and attempt to take advantage of this?Or is this not a goo idea?

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