What's Going to Turn Stock Funds Around?

We’ve mentioned at several points this year that domestic stock funds have been losing assets at a horrific rate lately; they saw another $14.2 billion in net outflows in the month of August. The mutual fund news source Ignites has asked its readership a simple question: When will this trend reverse? 

This question has implications not only for the mutual fund industry but for the wider stock market as well. More money flowing into the market, all other things being equal, would be good for stock prices.

The answers were fairly mixed. Roughly 31 percent, the highest figure for any response, said that steady employment and income growth is what will bring investors back to equities. Another 27 percent said the most important thing was government progress on taxes, spending and the deficit. Other answers getting some solid support include rising interest rates and several quarters of strong GDP growth.