Optimistic Investors Piled into US Stock Funds Last Week

February’s market correction may seem fresh, but investors broke records last week by contributing US$43.3 billion to US stock funds.

According to Bank of America Merrill Lynch, the sudden cash injection for stock funds accounted for almost 0.6 percent of total assets, which is the best number since September 2013.

Additionally, last week’s American Association of Individual Investors Sentiment Survey shows that investor pessimism hit its second-lowest rate for 2018 last week, dropping 7.1 percent to reach 21.3 percent.

The previous week, investors yanked $9.4 billion out of US stock funds.

Last week’s heavy investments came after a wild month for the American stock market, which included the Dow Jones Industrial Average Dow Jones Industrial Average (INDEXDJX:.DJI) taking a hit.

Other recent issues include potential market overheating and looming interest rate hikes from the US Federal Reserve. Three hikes are expected this year, but more could be in the cards. 

Those concerns were assuaged somewhat after last week’s news that inflation was right on track with original predictions in February. Data shows that the consumer price index rose 0.2 percent.

The announcement lent hope to the idea that the Fed will only raise interest rates three times this year, in line with current expectations. The central bank’s next meeting is scheduled for March 20 to 21. 

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article