New to Board
Should send this to RP
Individual Investors Not Fueling Recent Rally, Expert Says
Posted Jun 18, 2009 11:00am EDT by Aaron Task in Investing, Recession, Banking
Related: XLY, XLF, XLV, XLI, XLU, XLE, ^IXIC
Conventional wisdom is that retail investors – not institutions – have powered the market’s rally off the March lows.
Not so, says Charles Biderman, CEO of TimTabs Investment Research. His firm tracks the flow of money in and out of mutual funds. Since the start of May, he says, “U.S. equity funds have taken in a modest $7.1 billion” despite improved performance. Instead, retail investors are plowing money into bond funds.
Moreover, Biderman says that individuals did capitulate in the heat of the crisis, having been burned twice in the last ten years.
Normally, these would be bullish signs for the stock market. But Biderman is “cautiously bearish” and his model portfolio is 50% short, based on his concerns about the economy and high levels of insider selling.
It’s a long list of sectors he is shorting: XLY (SPDR Consumer Discretionary), XLF (SPDR Financials), XLV (SPDR Health Care), XLI (SPDR Industrials), XLB (SPDR Materials) and XLU (SPDR Utilities),
With oil near $70 a barrel again, the only thing he’s long right now is XLE (SPDR Energy).