Investors pile into equities

Optimism abounds among individual investors, setting the stage for another stock market milestone. Roughly $85 billion moved out of money market funds in the past three months, with at least half going into equity mutual funds — a bullish indicator, according to Jeffrey Kleintop, chief market strategist at LPL Financial LLC. The latest data from EPFR Global show that for the seven-day period ended April 10, equity mutual funds had $3.13 billion in net inflows, half of which went into dividend-focused funds. Bond funds over the period had net inflows of $3.52 billion, and alternative-strategy funds extended to 14 weeks a string of consecutive net inflows, with $953 million. The bigger picture, Mr. Kleintop said, is that support for stocks is continuing, with the S&P 500's forward price-to-earnings ratio now 15, just above the historical average of 14.9. Mr. Kleintop said reaching 15 is telling of the investor mindset. “For the first time in this rally, we're seeing, with the rising P/E, evidence that investors are willing to bet more on future growth than they have been in a long time,” he said. jbenjamin@investmentnews.com Twitter: @jeff@benjamin