While investors shunned stock mutual funds in 2009 despite their dramatic comeback, they may finally be poised to return to the stock market via long-term funds, The Wall Street Journal reports.
In the first quarter of this year, investors placed $19 billion into stock funds, compared to $41 billion in redemptions a year ago. Since their March 9, 2009 low, the Dow Jones Industrial Average and the S&P 500 Index have risen 70%.
Throughout 2009, asset managers were talking “blue in the face about the once-in-a-lifetime opportunities [in stocks]” but clients wouldn’t listen, said Gary Flam, a portfolio manager with Bel Air Investment Advisors. Now, without being prompted, investors are asking about stock funds.
That will be good news, overall, for stock investors, said Robert Adler, head of Lipper FMI Americas: “Investors are hungry for returns and see that opportunity in equities right now. It creates upward pressure on prices.”