Sunday, July 17, 2011 2 comments ++[ CLICK TO COMMENT ]++

Sunday Spectacle CXXXI

Equity, Bond, and Money Market Fund Flows versus Returns

(click for full-size image)

source: 2011 Investment Company Fact Book, 51st Edition. Investment Company Institute.

Some people use charts like these, where funds tend to flow in during peaks and flow out during troughs, to suggest that retail investors are dumb. However, I believe it is not what it seems. As George Soros has suggested under his reflexivity theory, which I support to a large degree, prices may influence investors but investors may also influence prices. The "dumb money" looks dumb because they themselves cause the outcome. In other words, fund flows will almost always be high at peaks and low at troughs.

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2 Response to Sunday Spectacle CXXXI

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October 10, 2017 at 2:49 AM

I really like to use charts for data analysis, write my paper for me because it allows you to visually look at the numbers and solve the problem.

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