Bats Highlights Hazards as Flows to Funds Hit Record – Bloomberg 01-14-13

Salient to Investors:

EPFR Global said investors added a record $3.1 billion to equity mutual funds in the first week of 2013, the most since it began tracking the industry in 2000. Investors withdrew $69.1 billion from US equity funds in 2012 and $375 billion since 2007.

Walter Todd at Greenwood Capital Associates said investors won’t keep sending money unless regulators fix the structure of markets that led to malfunctions last year.

John Carey at Pioneer Investments said investors are returning to equities because of more fundamental reasons like valuations below their historical average and an economy gaining momentum. Carey said news events like trading errors wouldn’t deter them from investing.

Analysts predict profits for S&P 500 companies will rise 8.6 percent in 2013 to a record $110.40 a share. The Index trades at 14.8 times reported earnings versus the 6-decade average of 16.4.

Barry James at James Investment Research said people already don’t trust the markets and is why people have been exiting the markets.

Read the full article at http://www.bloomberg.com/news/2013-01-14/bats-violations-highlight-hazards-as-flows-to-funds-hit-record.html.

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