While the forces of supply and demand in the stock market might be moving out of alignment, there's no need to panic about a decline in prices just yet. Although mutual fund inflows are expected to slow down soon and corporate stock offerings are projected to increase, analysts say this doesn't necessarily bode ill for the market over the short term. "There's a very loose connection" between fund inflows and the direction of the stock market, said Tom McManus, equity strategist at Banc of America. "We don't believe that money flow leads prices, we believe money flow follows performance." In the week ending March 3, investors poured $3.9 billion into mutual funds, up from $2.5 billion in the prior week, according to data from AMG. Still, analysts aren't impressed by the increase, noting that inflows are often strong at the start of the month because this is when many workers are paid and contribute to retirement plans. McManus said he still expects demand for mutual funds to moderate "in the near future" and is predicting average monthly inflows of $15 billion going forward. That's down from an estimated $29 billion in February and far below the $40.8 billion recorded in January. A drop-off in mutual fund inflows is fairly common at the end of the first quarter. That's partly because investors are busy selling stocks for tax purposes, but it's also due to a natural slowdown in momentum. The first three months of the year are usually very strong because there's so much pent-up demand from investors who prematurely hit their 401(k) contribution limits in the prior year. While money flows aren't always helpful in determining the near-term direction of the market, McManus said they're still worth watching. "There's no problem following the caboose on the train as long as you know it's the caboose," he said.