Legendary investor David Stockman believes that in the near future the market will see a massive outflow of capital from mutual investment fund and an ETF - for AMarkets materials.
Stockman warns that soon will break new crisis, even more rigid than the previous one. Experts predict an outflow of financial non-banking institutions at the level of $ 5-6 trillion. If you remember the last crisis in 2008, by the way, the market volume of funds was much more modest in scale - around $ 1 trillion.
Specificity ETF-funds is that the sale of assets by investors can not be overlooked.
ETF-product is not a liquid, such as a share. The fund manager must each time to create a bid to sell and wait for an appropriate offer. If you put just a lot of proposals for sale, this fact can not go unnoticed. Most of the current situation in the volatility goes to long-term investors. Those who bought the paper in 2007 on the area of the pre-crisis peak, is now on its portfolio value have the picture of August 2012. Many people do not stand up and sell the paper.
An interesting point - according to experts, 2/3 of the growth of S & P500 was done for 5 days on a segment of the last decade. This is the whole essence of the shares, says Stockman - time to buy / sell the paper at the right time. Otherwise, hold shares simply unprofitable - even taking into account the dividend can be the loser.