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News Link • Economy - Economics USA

Here's Why Investors Are Pulling Money Out of the Market

• By: Sal Arnuk and Joseph Saluzzi

 Events like the May 2010 Flash Crash, the failed BATS IPO and the Facebook IPO [FB 26.31 -0.50 (-1.86%)  ] fiasco have frustrated investors, leaving them wondering “what the heck is going on?”

 In response, they have pulled their money out of domestic equity mutual funds week after week.

 Since the Flash Crash, nearly $300 billion has been withdrawn from domestic equity mutual funds, according to the latest report from ICI.

 Institutional and retail investors tell us they believe they have no way of competing against the machines that now dominate the market and make money in every kind of tape. Markets have changed dramatically over the past 15 years mainly due to technological advances. No longer are institutional and retail investors – once called “owners” of the market -- the primary source of supply and demand. Their volumes are being drowned out by short term computerized “renters” of the market that can take high-speed advantage of order flow.

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