With the economic uncertainty seemed to loom longer on the global scale, many investors in America are moving away from the stock market. A report produced by the mutual fund industry have displayed that small investors have withdrawn a huge $33.12 billion from the mutual funds which are involved with the stock markets over the first seven months of the current calendar year.
According to a report published by the Investment Company Institute, the trade group of the mutual fund industry, most of the American investors are preferring to go for the safe investment route.
Past few decades have seen a dramatic rise in the number of small investors in the stock market and they were doing so in order to have good returns on their money. Since most of the Americans are responsible for their own retirement policies, stock market was a very favorite route for them.
One of the most important trends for the past few decades has been the rise of individual investors in the stock market. Due to the system in vogue in the market, a lot of Americans have to remain responsible for their own retirement and hence a large number of them have preferred to take the stock market or the mutual fund route. The American mutual fund industry is really shocked over the sudden reversal of this trend.
Brian K. Reid, chief economist of the institute said that, “At this stage in the economic cycle, $10 to $20 billion would normally be flowing into domestic equity funds, but rather billions are flowing out of the system. This is quite unusual.”
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