While investors withdrew a record $49 billion from equity mutual funds in July, according to Lipper, the news isn't all bad.

The record outflows in equities in July could signal a capitulation, or bottom, to the current bear market, which gives hope to a potential sustainable rebound. "This was classic crowd behavior, probably marking a significant market bottom," said Don Cassidy, a senior research analyst at Lipper of New York. "Several million investors gave up at virtually the same time, just as the selling climax in stocks that ended the morning of July 24 showed."

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