For the first time this year, investors took money off the table.
According to the latest data from the Investment Company Institute, investors pulled $1.13 billion from U.S. stock mutual funds during the week ended Feb. 27. That's the first time investors took money out of stocks this year, and it came just days before the Dow hit a record high.
But that doesn't mean the tide has turned. One week of outflows is not a trend. And after yanking more than $150 billion from U.S. stocks during each of the past three years, investors still have plenty of money sitting on the sidelines.
Stocks have continued to head higher thanks to a string of better-than-expected economic reports and stimulus moves by the Federal Reserve.>
"As we get further and further away from the crisis, people get more confident," said Doug DePietro, managing director in institutional equities at Evercore Partners. "I wouldn't take too much from one week's data."
So far this year, investors have put roughly $20 billion into U.S. stocks. International stocks are also drawing strong interest. In the latest week, international stock funds attracted $2.18 billion, bringing the year-to-date tally to just over $34 billion.
"People still want to own the market," said DePietro.
But bonds, which are perceived as less risky than stocks, continue to attract solid interest as well. Bond funds took in nearly $5 billion last week, bringing the year's total to just over $50 billion. Hybrid funds, which invest in both stocks and bonds, brought in $2.4 billion last week.
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The Dow Jones industrial average hit a new all-time high today, topping the 14,200 level for the MOREPaul R. La Monica - Mar 5, 2013 12:00 PM ET
After taking money off the table toward the end of 2012, individual investors came back with a vengeance in January, adding a record $80.6 billion to their mutual fund holdings, according to the Investment Company Institute.
Investors added nearly $38 billion to stock funds during the month, with a little more than half of that flowing into international stocks.
Nearly $33 billion, or 41% of the total monthly inflow, went into MOREHibah Yousuf - Feb 27, 2013 3:43 PM ET
The United States lost its pristine AAA credit rating a year ago Sunday, but you wouldn't know it by looking at the Treasury market.
"The telltale sign was day one: Standard and Poor's downgraded the U.S. credit rating on a Friday night, and Monday morning, U.S. Treasuries exploded," said Paul Montaquila, head of fixed-income trading at the MOREHibah Yousuf - Aug 5, 2012 8:20 AM ET
Not a member yet?Sign up now for a free account