The same pattern repeated in the next cycle. It was not until 2005 that public investors began timidly putting money back into the new bull market. The inflow then increased, reaching a new record in 2007, as the severe 2007-2009 bear market began. Investors continued to pour money in at a robust pace in 2008 as that bear market meltdown worsened.
If we fast forward to the next graph, we see that it was not until after the current bull market began in 2009 that investors began pulling money out of the market, and continued to do so in 2010, 2011, and 2012, even as institutional investors were pouring money back in.
More recently, investors began pouring money back into the market in the second half of 2012, and did so at a near record pace last year.
I was surprised to see a report this week from Bloomberg News and the Investment Company Institute that investors flooded ten times as much new money into stock mutual funds and etf’s over the last 12 months as over the previous 12 months.
The market is up roughly 6% for the year so far, and no support levels have been broken.