Portfolio

The tax-free money market fund industry continues to shrink rapidly, squeezing what had been a major source of short-term credit for municipalities and arguably leading to higher borrowing costs for state and local governments.

Both stock and bond funds saw net withdrawals last week.

Investors withdrew $8.48 billion from long-term funds in the week ended Dec. 15, the Investment Company Institute said Wednesday. The lion’s share of those withdrawals came from bond funds, which lost $8.62 billion. The week earlier, bond funds had outflows of $1.66 billion.

The year of the Flash Crash, debt crises in developed economies and regulatory reform gave financial planners plenty to discuss with their clients. The magazine looked behind these headlines and others to give industry professionals leading-edge insights into how their profession would cope and thrive.

We took a look back at where the industry went right (and where it didn’t), whether it involved wading deeper into social media or missing the mark on CRM systems.

One of the postings after a recent chat has started us all on a discussion of another possible way to handle this macroeconomic chore: Actually do your own evaluation of the markets and decide whether to be in or out.

Experts increasingly believe the bond rally has run its course.

Although stocks didn’t rally until the fourth quarter of this year, that momentum could continue into 2011, according to The Wall Street Journal’s “Heard on the Street” column Wednesday. Thus, the two-year-long aversion to stocks and stock funds could finally be coming to an end.

Morgan Stanley Smith Barney characterized its outlook for 2011 with the phrase “recovery becomes expansion.” The business-cycle recovery in the global economy that began in the summer of 2009 is now an expansion, it says in a new report.

Hedge fund managers found it a little easier to hang out their own shingles in the third quarter.