First off, what does this mean exactly? 'Net equity outflows' occur when investors collectively withdraw more capital from stock funds and individual equities than they invest... Over the past month or so, U.S. equity funds experienced a sharp acceleration in outflows, with the most recent week alone totaling $32.27B, marking the largest outflow since December of last year. Why is this 'potentially' a big deal? Net equity outflows tend to increase market volatility while driving asset prices lower. For those using margin, this can lead to forced liquidation cycles as well. Cue warning horn! The so-called experts whose opinions I've read say this was likely driven by rising oil prices & ongoing inflation concerns. No doubt those played a role, but plenty of other contributors as well IMO (i.e. job losses, spiraling debt, rising rates, etc., etc.). Simply put... Things are a mess IMO! No telling if the net equity outflows seen over the past month will continue, but it's worth paying attention to IMHO. I don't make the rules; I just play the game... Happy investing everyone!
208 views
1 Comments
ETF Go@etf.go · 33mEdited
As an add on for others reading - just as broad inflows benefit Market Indexes and the MegaCap overweights - broad outflows can have an outsized negative impact on those same Indexes/Stocks. From your post on higher rates - the 5%-5.5%+ bond yields start catching the eye of larger institutional investors and can slow/drain dollars from the equity pool. Definitely something to watch and be aware of. 👍
See the full comment section 👀Sign up for the full Blossom experience!
