11 Jan 2012, 10:22am
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  • It’s time to buy

    There are few decent signals to be had in the stock market. If this report from the Investment Management Association is correct, then we’ve just had a good one.

    Equity funds saw their largest outflow on record, with net outflows of £864 million in November, compared to a monthly average inflow of £506 million for the previous twelve months. Equity funds have seen net outflows in four of the last five months, following over two years of net inflows.

    For the third month running, the highest selling asset class was Bonds, with net retail sales of £443 million, above the monthly average of £332 million for the previous twelve months.

    Balanced funds were the second highest selling asset class when excluding the ‘Other’ category. Net retail sales of Balanced funds totalled £262 million in November, the lowest since April 2009 and well below the monthly average of £493 million for the previous twelve months.

    The message is clear. Buy equities this year 🙂  I was so chuffed on reading this I caught up with my regular purchase of a FTAS and a global EM tracker funds which had gone astray over the Christmas break. As Warren Buffett  said:

    Be fearful when others are greedy, and be greedy when others are fearful.

    Looks like people are fearful…

     

    I think you could be right on the money. Funny, I just read a similar article in a Canadian business mag. Looks like billions chasing bonds. They are so popular the investment industry is marketing Bond ETF’s to meet the demand.( Another recipe for disaster. ) Anyway, you’re probably right. Maybe a few of us geezers might get lucky over the next few years as our peers run for the safe exits of bond ETF’s ( Lol ).

    Yes, I know. I’ve read a few similar reports. However, I still think that there is room for a substantial downward correction when the Eurozone mess turns nasty again. I might buy a little in the meantime, but I want to keep most of my powder dry.

    > I want to keep most of my powder dry.

    That’s what all the bears say in the start of a bull run 😉

    Same here, well, I may need to live off it if the Euro blows. Heck, make that when.

    But on the other hand it’s rude not to tip your hat to all the guys running for the hills, so I added to a holding of an IT as well as taking on some more of those index funds.

    @g

    Maybe a few of us geezers might get lucky over the next few years as our peers run for the safe exits of bond ETF’s

    There has to be some compensation for the grey hairs, eh? I remember running for the hills in the dotcom bust, I’ll try running the other way this time 😉 It’s easier without the mortgage this time!

     

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