Last week the New York Times released a feature article on how mutual fund investors were “cashing out” of their mutual funds.

Specifically, it talked about how “small investors” investors are cashing out of stock funds and moving into bond funds.

In Striking Shift, Small Investors Flee Stock Market the paper reports:

Investors pulled $19.1 billion from domestic equity funds in May, the largest outflow since the height of the financial crisis in October 2008…

As investors pulled billions out of stocks, they plowed $185.31 billion into bond mutual funds in the first seven months of this year, and total bond fund investments for the year are on track to approach the record set in 2009.

The trend of mutual fund investors selling stocks and buying bonds has been going on for a long time. It’s usually a good sign too because mutual fund investors tend to buy and sell at the worst possible times.

But the “big news” picked up the financial media, and which was only added to by the ongoing strong of disappointing economic reports, only seemed to hide a much more disturbing trend.

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