Over the last few weeks I have talked with quite a few investment managers. Some even manage investments on a wholesale basis for other investment managers.
What I learned is that quite a few people pulled their money out of the market this summer and into cash.
While it's not as frequent (perhaps those that stayed have reconciled themselves to the ups and downs), there are still people interested into moving to cash.
I've heard the recent treasury auction was oversubscribed by 400% for federal treasury bonds paying 0% interest. While renewed faith in the US Government's credit is good, what assets were sold to provide cash for the purchase?
My biggest concern is that many investors will have converted their stocks and possibly bonds to cash and will miss the market rebound. Now it may take months or even years to rebound, but historically they do rebound within 2 years.
The critical response in this situation is to stay the course and follow your long term investment plan.