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Fri Mar 9, 2018, 03:25 PM

As Dow Tops 25000, Individual Investors Sit It Out

From January.

Full disclosure: I'm not fully invested either. I'm waiting for a drop.

As Dow Tops 25000, Individual Investors Sit It Out

Since 2012, $1 trillion has been pulled from retail-investor mutual funds that target U.S. stocks

By Akane Otani and Chris Dieterich

https://twitter.com/akaneotani
akane.otani@wsj.com

Updated Jan. 4, 2018 4:21 p.m. ET

One of the biggest surprises of the U.S. stock marketís relentless rally is how many individual investors have run away from it.

The Dow Jones Industrial Average closed above 25000 for the first time on Thursday, punctuating a record-setting period nearly unmatched in U.S. history. Yet throughout the nearly nine-year surge in share prices, individual investors have continued to yank money out of funds that own U.S. stocks.

Nearly $1 trillion has been pulled from retail-investor mutual funds that target U.S. stocks since the start of 2012, according to EPFR Global, a fund-tracking firm. Over that same period through Wednesday, the S&P 500 soared 116% and, along with the Dow Industrials and Nasdaq Composite Index, rose to 190 all-time highs.

Much of that nearly $1 trillion in mutual fund outflows likely made its way back into the stock market through lower cost exchange-traded funds. The EPFR figure excludes money flows to ETFs and institutional mutual fund shares, and the firm estimates that perhaps as much as 40% of the mutual fund stock outflows were recycled into stocks through ETFs.

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