Stock Funds Hope For a Bigger Bang
January 30, 2013
In 2010, domestic stock funds were up roughly $40 billion four months into the year ... and finished flat.
In 2011, such funds were up $56 billion. And finished down by more than $100 billion, notes Lemieux.
"We've seen these kinds of runs before,'' he said.
In the third week, he expects stock funds will pull in a minimum of $1 billion.
But the first real test will be over the next two months, as public companies begin reporting their year-end revenue and profit figures, according to Lemieux.
Plus, the federal government's fiscal drama is not over, the two Lipper analysts said.
"Another question market ahead of us," Roseen said, "is what are they going to do about the budget?"
Coming next: A debt ceiling that must be resolved by the end of March. The fiscal cliff deal was just a "band aid,'' for the moment, Lemieux said.
At this point, though, the good news is that stock funds are prospering pretty much across the board, Lemieux said.
Domestically, funds that invest in large capitalization growth stocks picked up $1.4 billion. So did funds that invest in "core" middle-sized companies.
In fact, the value of stocks has been rising for nearly four years. Since closing at 683.38 on March 6, 2009, the Standard & Poor's 500 broad index of stock market values has gone up 118%.
The Standard & Poor's 500 reached a five-year high at the end of December. Just last week, on January 22, it stood at 1,490, just 75 points away from its all-time high of 1,565, set on October 9, 2007.
It's too early to guess whether stock funds will all of a sudden be investors' favorite place to park their long-term assets, nonetheless.
"We'll have to see how this sustains" itself, Lemieux said.