1] people invest money in funds
2] funds buy stocks and try to run them up
3] funds post good/impressive records
4] based on those records investors pile in (using hindsight)
5] funds get more money and they run up stocks some more
6] repeat steps [1] to [5] until all money is invested
7] there is no more fuel (money) to run up stocks
8] funds perform poorly as smart money exits and prices fall
9] funds try to stem tide (like past year and right now) by mktg
10] people get scared and pull out
11] funds sell to meet redemptions
12] repeat steps [10] and [11] until money is sucked out
13] when net redemptions stop..... we start all over again at [1]
2] funds buy stocks and try to run them up
3] funds post good/impressive records
4] based on those records investors pile in (using hindsight)
5] funds get more money and they run up stocks some more
6] repeat steps [1] to [5] until all money is invested
7] there is no more fuel (money) to run up stocks
8] funds perform poorly as smart money exits and prices fall
9] funds try to stem tide (like past year and right now) by mktg
10] people get scared and pull out
11] funds sell to meet redemptions
12] repeat steps [10] and [11] until money is sucked out
13] when net redemptions stop..... we start all over again at [1]