My mind keeps running back to the $3 trillion in bank deposit growth. Flight to quality indeed, if the banks are gonna throw money at any mortgage that moves.
Meanwhile, where are the mutual fund blow-ups? Except for a few hiccups with money market funds exposed to too much auction-rate garbage, mutual funds have been pretty quiet.
A quick glance at inflows (at AMGdata) shows that trust in the both mutual funds and ETFs is still pretty high: Q2 had $70 bln flowing into stock and bond mutual funds and $56bln into ETFs. That's annualized long-only inflows of half a trillion, which doesn't sound horrible, without digging into historical context.
All in all it goes to show you, you may overpay for beta with actively managed funds, but it's better than overpaying for leveraged idiocy. The corporate governance overhead associated with mutual funds may in fact work for investors.
Wednesday, July 16, 2008
Safe haven
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2 comments:
No one really knows what goes on in their mutual funds, they just pour money in like lemmings going to the edge of the cliff. If you are retiring this year after the past ten years in an index mutual fund you would not have beaten the real inflation rate (energy and food cost increases included, like the old days when the government did not continuously lie to the American people). PUT SOME CREAM ON IT NOW!!!
I'll show you some inflation.
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