US equity markets recently reached an unhappy milestone. Investors have now withdrawn more than $270bn from domestic equity mutual funds since the May 6 2010 flash crash.
When the financial crisis first struck in the autumn of 2008, investors withdrew almost $100bn almost immediately. As markets slowly recovered in the spring and summer of the following year, investors started to return to these funds, a trend that continued until early May 2010. But in the two years since the flash crash there has been an uninterrupted rush for the exits, with withdrawals at a record pace, even as market indices rise.