One factor that has fueled the recent slump in the stock markets has been investors taking huge amounts of money out of U.S. equity funds. Over the four months that ended in August, investors have withdrawn about $75 billion from American stock funds. In August alone, there was $33.6 billion taken out of these mutual funds. By contrast, during the first four months of this year, those same funds had taken in around $18.7 billion.
How bad is that? In the four months after the Lehman Brothers bankruptcy, at the end of 2008 and beginning of 2009, investors pulled out $72.8 billion from equity funds. We've managed to top that mark. It's no wonder that in those four months, the S&P 500 managed to lose more than 10 percent of its value.
The big winner in all of this has been bond funds. From April through July, American bond funds added $42.3 billion from investors, although they did start to see some outflows in August.
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