Bullish or bearish?
The chart above shows the total amount of money since August 2, 2011 that has been invested in the Dow Jones Industrial Average (DJIA) – the index – by institutional investors and retail investors via various forms of investment vehicles. In total more than $56 billion has been invested in the DJIA since Aug. 2011.
This could be taken as a sign of confidence from institutional investors in one of the most prolific indices in the U.S. market.
Digging a little deeper, there are two major points to extract from this data. First is the actions of retail investors. In the last (almost) 5 years, retail investors have removed a total of $12.3 billion from the DJIA. Since the beginning of 2016 that number has grown from $10.1 billion, meaning that retail investors have removed $2.2 billion in assets from the index. The implication would be that retail investors feel that the index is not the best place for their money.
On the other side of the coin, institutional investors have been pouring money into the DJIA since the beginning of 2016. To start the year, institutional investors had moved $18.6 billion into the index, a number that now stands at $44.1 billion. Institutional investors have added $25.5 billion to the Dow Jones year to date. This would imply a certain bullish perspective from institutional investors.
The actions of institutional investors is exactly opposite of their own actions in 2015. In 2015, institutional investors removed a total of $39.4 billion in assets from the DJIA, implying a bearish perspective on the market.
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