There's another sign that investors' confidence is returning: Last month they added money to U.S. stock mutual funds at the fastest clip in seven years. The year-opening surge also marked the first time in nine months that investors added more than they withdrew.
All told, investors deposited a net $21.3 billion to U.S. stock funds in January, the biggest monthly increase since a net inflow of $23 billion in February 2004, industry consultant Strategic Insight said Friday.With these types of inflows it becomes less of a mystery why the market refuses to pull back. Mom and pops have not proven to be the best market timers but they do act in a very herd-like manner so these inflows can continue for a while. I would note that a lot of money has been exiting bond funds, specifically munis, and those markets seemed to staunch the bleeding on Friday.