Cashes to Cashes: Data Show Money Market Funds Ballooning

Record billions of greenbacks gushed into mutual funds last year, but take a closer look at the numbers and you can't miss investors' shriveled confidence in a sagging stock market.

In sum, funds took in a record $434.5 billion last year, according to preliminary estimates released Wednesday by fund tracker Lipper. But 75% of that money went into money market funds or cash accounts. Another 17% of last year's net sales flowed into bond funds. While investors didn't jump out of stock funds en masse, they invested just a net $34 billion in them last year, compared with some $310 billion in 2000.

The upshot: With the S&P 500 and Nasdaq Composite down 20% and 54% over the past two years, respectively, fund investors' faith in the post-bubble stock market is clearly shaken. After annual gains of more than 20% from 1995 through 1999, many are no doubt surprised to see the S&P 500 trailing bonds and in the red over the past three years. ...