Investors withdrew $6.8 billion from US stock funds in September, $15.5 billion in August and $22.9 billion in July. Makes sense, right? Q3 was the worst quarter for US stocks since the 2008-9 financial crisis. Investors withdrew another $18.2 billion in October, which was the best single month for US stocks in 25 years with a gain of 10.9% in the S&P 500. YTD, US investors sold $53.5 billion of US funds, continuing a pattern of net annual redemptions that has prevailed since 2008.
Warren Buffet, meanwhile, invested $23.9 billion (including $7 billion in stock purchases) in US markets in Q3 - his fastest pace of investment in 15 years. As of March 2011, Buffet was worth about $50 billion, so who do you think is making the correct assessment of the investing climate?
We believe that the current confluence of strong and rising earnings, low stock price valuations and exceptionally low interest rates presents one of the best stock buying opportunities in 50 years. We also believe that most Americans will not take advantage of that opportunity because most invest with their hearts, not with their heads, and right now their hearts are filled with fear! To help our clients invest with their heads, we present: