The Investor's Dilemma: Fight or Flight?

[RedEarth]

The Investor's Dilemma: Fight or Flight?
Despite Fed rate cuts aimed at shoring up confidence, investors have cashed out of the market. Some pros see opportunities amid the wreckage

The Federal Reserve's Jan. 22 emergency rate cut arrives at a time when investors are rapidly running away from stocks, a sign of plummeting confidence in both the economy and the market.

Last month, investment researcher Morningstar (MORN) says, investors pulled a net $27 billion from equity mutual funds, the biggest outflow of funds since July, 2002. Only halfway through January, investors had already yanked another $36 billion from equity funds, according to TrimTabs Investment Research.

While some fund managers argue stocks are now selling at attractive bargain prices, individual investors clearly aren't taking the bait. Even the mightiest companies have been tripped up. Stocks that provided huge gains in 2007—such as investor favorites Google (GOOG), Monsanto (MON), and First Solar (FSLR)—have suffered as sellers took profits while they still could.

More Sellers Than Buyers
"Right now, almost across the board, there are more sellers than buyers," says Bob Bacarella, portfolio manager of the Monetta Fund (MONTX).

Since the start of the year, the S&P 500 is off almost 11% and the Dow Jones industrial average has dropped almost 10%. Stocks recently accelerated their descent, but individual investor dollars have been flowing away from the market for months. TrimTabs estimates $106 billion has left U.S. equity mutual funds since May, a torrent not seen since $102 billion exited those funds over nine months in 2002.

http://www.businessweek.com/investor/content/jan2008/pi20080122_810075.htm?chan=top+news_top+news+index_top+story

[Ganja Ninja]

1. If only we had a plane loaded with pallets of cash we could ...

hand out to the American people.:argh: