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Investors are selling stocks, but the market keeps rising

Typically, stocks rise because investors are buying them, increasing prices. This should come as no surprise, as it’s nothing new. Most people understand the increasing prices of the stock market – however there are stock market trading courses that can be taken to gain a better understanding. By taking a course and expanding your knowledge, it would be much easier to know not just that the prices are rising, but why they are. For example, the more investors there are who buy tesla shares uk, usa, etc., the more the price of these stocks will increase. But that’s not what’s happening in 2019.

What’s new: U.S. equity prices are soaring to record highs, with the S&P 500 up 17% and the Nasdaq up 21% in just 4 months. But not only are investors not buying, they’re selling.

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The big picture: Stock funds have seen $4 billion of outflows so far in 2019, surpassing the $2.9 billion of outflows for all of 2018 when the S&P fell by 6%. This year’s outflows included a drawdown of nearly $11 billion in just the month of March, according to data from Lipper, which tracks $49.1 trillion in assets globally.

This is way over my head. What worries me is that the stock market may be showing inflation. The flow of money from Trump’s annual trillion dollar borrowing spree may be inflating stock prices without increasing capital investment in productivity.

What’s happening: The strange phenomenon can partially be explained by investors moving away from traditional mutual funds at a historic pace, particularly in U.S. stock funds.

  • “The negative investor sentiment about domestic equity mutual funds has been a long-term trend,” Pat Keon, senior research analyst at Lipper, tells Axios. “The net outflows for this group have been worse over the last several years than even during the global financial crisis.”

But that’s only part of the story. Investors also are clearly wary of the historic stock rally, now pushing toward an 11-year bull run, and are nervous about global growth slowing. Equity funds have seen 11 straight weeks of net outflows, Lipper’s data shows. Could this mean there will be a time in the future where stocks are at their lowest and it could be wise to look at something like these motley fool reviews or other reviews similar in order to try and make some profits within the stock market?

  • Safe-haven fixed income funds, on the other hand, have seen $107.7 billion of inflows year to date.

The intrigue: The bond market is reflecting this worry, but stocks so far have not, largely because of company buybacks and low volumes, analysts say.

  • U.S. companies have purchased $272 billion of their own shares so far this year, on pace to break 2018’s record $1.085 trillion.
  • There also have been less transactions overall, says Jim Paulsen, chief economist at the Leuthold Group, opening up the market to bigger price moves. That’s allowing small buys to have big impacts.

The bottom line: The “Twilight Zone” state of affairs may actually be good news for stocks because it means investors aren’t overconfident, say analysts at Bank of America-Merrill Lynch. Because they’re not overconfident, it may mean that some investors are more likely to take the time to read this Apps für Aktieninformationen (stock information apps) to learn more about the best ways to invest your money in the stock market. And due to this caution, it could benefit a lot of people in the long run. In fact, sentiment is historically low, according to the bank’s consensus indicator.

  • “Historically, when our indicator has been this low or lower, total returns over the subsequent 12 months have been positive 92% of the time, with median 12-month returns of 18%,” BAML analysts said in a note to clients.

But, but, but: It may just mean the stock market is pumped full of hot air.

Go deeper: Investors are selling stocks, but the market keeps rising


0 Comments Add Yours ↓

  1. Roger Rabbit #
    1

    Corporate stock buybacks are a major part of what’s propping up the stock market right now.

  2. Road Runner #
    2

    For every share that’s sold, there’s a share that’s bought. So, not only are investors selling stocks, investors are buying the very same stocks investors are selling. I agree that this is way over your head. Stick with stuff you know, or at least pretend to know, like South Carolina, which, by the way, you haven’t maligned in awhile.

  3. Mark Adans #
    3

    At the end of the day the stock market is just that a market for stocks. The rules of supply and demand are fundamental, but bubbles happen, Companies come and go. You can try trading tulips, but these days that market is pretty small, but a thing in Mt. Vernon. Come see Americas tulip industry in Mt Vernon. Invest some shekels in some seeds and on the stock exchange at publicly exchanged companies, and you will have done diligence.
    Meanwhile Boeing will recover after another six months to a year rough riding.

  4. theaveeditor #
    4

    Dear Dr. Quick,

    Please remit $14.23 for editing and posting your missive on TA

  5. Road Runner #
    5

    Who’s Dr. Quick? Maybe one of legion you’ve defamed and offended.

    Why would anyone pay you to post your gibberish?

    And, by the way, the Road Runner’s comments require no editing–let alone from the illiterate likes of a person such as you.

  6. theaveeditor #
    6

    Dr. Quick vous restez une fraude. Si vous utilisez un VPN, vous devez apprendre à parler la langue de votre adresse IP.