By all counts, May was a terrible month for the stock market. According to Strategic Insight, investors withdrew $2.7 billion more money than they deposited into stock mutual funds in May 2011. This snapped a four month run, from January to April 2011, where net deposits were positive. Investors put in a net $39 billion into U.S. stock funds in the first five months of 2011. Prior to 2011, investors were withdrawing more than they deposited each month since the 2008 stock market crash. Investors appear to be reacting to disappointing news about the economy, high fuel costs, tornadoes and flooding in the south, and the European debt crisis.
Here are details of how investors moved their money in May 2011:
- Foreign stock funds: Net $6.6 billion deposited
- Bond funds: Net $19.9 billion deposited into taxable bond funds
- Municipal bond funds: Net $200 million was withdrawn
- Money-market funds: Net $8 billion was withdrawn
- Exchange-traded funds: Net $6.5 billion was withdrawn