New York, NY (PRWEB) August 21, 2012
According to industry consultant Strategic Insight, June wasnt a good month for stock mutual funds. Investors continued to remove more than they deposited, withdrawing a net of $ 7.7 billion from U.S. stock funds. According to a recent article from USA Today, the rising market still isnt giving investors enough confidence to hold onto their investments. Net withdrawals over the last four months were totaled at $ 15 billion. Ron Olsthoorn, a financial expert says this could have an effect on long-term investments.
Ron Olsthoorn says investors still dont trust the rise in stock index. According to the Standard & Poors 500, the stock index rose about four percent in June. Avi Nachmany, the research director with Strategic Insight agrees with Olsthoorn. Gains in the stock market have not emboldened investors who worry about the ever-present risk of future losses, comments Nachmany.
According to Ron Olsthoorn, investors are moving their money into what they feel are more secure investments. Strategic Insight showed an increase in foreign stock investments and bond funds. Although net deposits into bond funds are slowing, bonds have attracted cash for ten consecutive months since last September.
Ron Olsthoorn is not surprised by Strategic Insights findings on how investors are moving their money. Olsthoorn worries what effect the shift of money-market funds will have on fund returns and interest rates. The appeal of money-market funds has always been that they offer investors a safe place to leave their cash temporarily. With returns barely above zero, prospects of higher returns have dimmed.
The retreat from stock-based mutual funds is an indication of investors sentiment and confidence in the state of both domestic and world economic conditions. Investors are uncertain as to what to invest in for the long term and this makes real returns on investment and retirement funds a real challenge. For the time being we are seeing a flight to safety in exchange for higher returns as investors restructure their portfolios to protect against further erosion of the funds, stated Ron Olsthoorn.
Ron Olsthoorn is an investment and insurance professional with experience as a Certified Financial Planner. Olsthoorn has completed the Certified Financial Planning Course and studied at the Centennial College of Applied Arts and Technology. He received his Ontario Teaching Certification at the University of Toronto.
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