Investor’s Business Daily – Mutual fund investors don’t seem to have much faith in the U.S. stock market these days. Despite a smart rally — the S&P 500 is up 7.3% since its Oct. 13 low — money has been coming out of U.S. stock funds.<\/p>\n
Investors have pulled a net $500 million out of U.S. stock funds since August, according to the Investment Company Institute and TrimTabs.<\/p>\n
During the same period they’ve shoveled $60.9 billion into international funds, which have been performing better.<\/p>\n
At first glance, that might seem like bad news for those rooting for the U.S. market. After all, it takes new money to drive prices higher.<\/p>\n
But in the perverse ways of the stock market, it might actually be good news for U.S. fans.<\/p>\n
The reason: The crowd is usually wrong at the major turning points in the market. Most investors are too afraid to step in just as stocks get ready for a sustained rally. And they throw money greedily into the market just as they should be reining in their enthusiasm.<\/p>\n