The Incredible Exodus From Stock Mutual Funds

Over the last six months, we've seen an average of $40 billion in outflows from equity mutual funds. These massive outflows are a great contrarian signal. And it means stocks should head higher in the coming months... A publication from [Stansberry Research] [Stansberry Research 20 years] [DailyWealth] The Incredible Exodus From Stock Mutual Funds By Chris Igou, analyst, True Wealth --------------------------------------------------------------- Investors are stuck in the same mindset they've been in for weeks... sell, sell, sell. Folks want access to cash during tough times. So they've been selling stocks to raise cash they can keep on hand. This isn't typical selling, though. Equity mutual funds are experiencing the biggest outflows in their history. Over the last six months, we've seen an average of $40 billion in outflows from these funds. These massive outflows are a great contrarian signal. It means stocks should head higher in the coming months. Let me explain... --------------------------------------------------------------- Recommended Links: [Who's REALLY behind the riots]( Once you understand who these individuals are, and what's really behind their anger... you'll understand what's really happening in America right now. You'll also start to see why this upcoming election is almost guaranteed to create a nightmare for Baby Boomers. [Get the full story right here](... --------------------------------------------------------------- [This Bankruptcy Will Hit Close to Home]( Something big is happening in America – and almost no one is paying attention. A multimillionaire has written a fascinating analysis explaining how so many are now getting rich... while so many more are being left behind. [His write-up is posted free on this website here](... --------------------------------------------------------------- The COVID-19 crisis came on swiftly, crushing the market. Stocks have recovered since the bottom in March. They're less than 10% below all-time highs right now. But investors are still scared. They're stampeding out of equities. The easiest way to see this is through total equity mutual fund flows. This is a real-time indicator that helps us gauge investor sentiment. After all, in the investment world, people show their emotions with their wallets. When folks are scared, they pull money out of the market. And when they're excited, they buy stocks as fast as they can. Today, we're seeing money rush out of stocks. The chart below shows the six-month average outflows from equity mutual funds around the world. Take a look... Money has been flowing out of equity mutual funds for years. But today's outflows are the largest they've been in more than 25 years. And we've only seen outflows like these a handful of times since 1995. We saw similar cases in 2002, 2008, 2012, and 2016... all of which were terrible times to pull money out of stocks. In fact, each one of these instances turned out to be a great time to buy U.S. stocks. Take a look at the table below... Buying after record outflows from equity mutual funds led to double-digit gains every time. Even more, each one of these occurrences happened right before a multiyear rally in U.S. stocks. This is why contrarian investing is so powerful. By figuring out what the crowd is doing and making the opposite bet, we set ourselves up for big, long-term gains. Right now, investors are hitting the panic button. We're seeing record outflows from equity mutual funds around the globe. That negativity is a good sign, though. It means the bottom is likely behind us. And it should create a major tailwind for U.S. stocks as prices rise and money starts to flow back into these funds. Combine this with the fact that the trend is back up in stocks... and our action becomes clear. It's time to buy. Good investing, Chris Igou Further Reading "Right now, most folks are scared," Steve writes. They're selling in droves, all fearing the worst. But in reality, the trend has turned back in our favor. And that means we've got a great setup to improve our returns... Read more here: [Stocks Are a "Fat Pitch" Once Again](. The opportunity for outsized gains usually appears when investors are panicking. And history tells us that right now, fear from the recent bear market could lead to huge gains in the near future... Get the full story here: [Why Extreme Fear Could Be a Positive for U.S. Stocks](. INSIDE TODAY'S DailyWealth Premium The next wave of online cybersecurity is here... Mutual funds will likely put their hoards of cash back into stocks soon. And this technology stock will be a big winner as stocks move higher... [Click here to get immediate access](. Market Notes HIGHS AND LOWS NEW HIGHS OF NOTE LAST WEEK New York Times (NYT)... [media]( Adobe (ADBE)... [cloud services]( PayPal (PYPL)... [mobile payments]( Square (SQ)... mobile payments eBay (EBAY)... online marketplace JD.com (JD)... China's Amazon Sea Limited (SE)... e-commerce and gaming Tractor Supply (TSCO)... [rural lifestyle retailer]( Home Depot (HD)... home improvement Fastenal (FAST)... [safety equipment]( Booz Allen Hamilton (BAH)... ["offense" contractor]( Flutter Entertainment (PDYPY)... "vice" stocks Rollins (ROL)... [pest control]( TAL Education (TAL)... Chinese tutoring company NEW LOWS OF NOTE LAST WEEK Not many... The market has been rallying from its recent lows. --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers’ feedback. To help us improve your experience, we’d like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. 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