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It may be too early to say the correction is over, but don't tell that to retail investors.

Through the first two weeks of July, the average Joe piled so much money into mutual funds that July is on pace to be one of the biggest months ever for new cash, according to

Trim Tabs

, a Santa Rosa, Calif.-based fund-industry tracker. The renewed vigor comes after net inflows slowed during the recent market downturn.

According to estimates from Trim Tabs, net inflows to funds through July 18 are just under $20 billion. If they remain at their current pace, the tally at month's end would be more than $36 billion, topping the record $32 billion reached in February.

The experts say July's final tally isn't likely to top February levels. Most inflows occur during the first few days of the month. But it does mark an improvement from the spring: New inflows slowed to $4.7 billion in May, according to

Financial Research

.

Along with the strong performance so far in July, which tends to be a slow month, some advisers are sensing an uptick in investor sentiment as well. "People are feeling that the worst is over," says Marilyn Capelli Dimitroff, a financial adviser in Bloomfield Hills, Mich., adding that most investors didn't try to withdraw money from the market during the slide but were hesitant about putting it in.

Some of the favored sectors are a surprise: Money has been heading to small-caps and international funds. Recent favorites technology and health care also turned up in the top five, according to Trim Tabs.

"People are still enthusiastic about technology and enthusiastic about the potential in the wireless area and the potential in medicine and biotech," says Dimitroff.

"An alternative to scary tech stocks is to invest in a less scary tech fund," says Edward Rosenbaum, director of research with

Lipper

.

Fund observers say not to read too much into the numbers.

"It's not necessarily that there was a collapse of confidence before," says Avi Nachmany, president of

Strategic Insight

in New York. "Confidence sustained itself strong all throughout the correction in the

Nasdaq."

Geoff Bobroff, a fund consultant in East Greenwich, R.I., says some investors might want to take the pack mentality as a contrarian indicator. The last time investors threw so much money at stocks, February, a market top soon followed. "It's probably the worst time to be buying, and some investors may start thinking about selling," says Bobroff.