So much for timing the market. Investors who skipped out of September lost a bundle of money.

Investors Pulled $16 Billion From U.S. Stock Funds in September

October 13, 2010, 12:09 PM EDT

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By Sree Vidya Bhaktavatsalam

Oct. 13 (Bloomberg) — Investors removed $16 billion from U.S. stock funds last month even as the Standard & Poor’s 500 Index posted its best September since 1939, according to data from Morningstar Inc.

International stock funds attracted $1.5 billion in September, while bond funds collected $26 billion, Chicago-based Morningstar said today in a report. Investors withdrew money from U.S. stock funds despite an 8.8 percent increase in September, the biggest gain for the month in 71 years.

Investors have removed $84 billion from U.S. stock funds since the beginning of 2009, favoring the perceived safety of bonds over a 74 percent rebound in stocks from their March 9, 2009, low. Withdrawals accelerated after the stock-market plunge on May 6, with investors pulling $65 billion from mutual funds that buy U.S. equities since April, Morningstar’s data show. Investors have poured about $221 billion into bond funds and $22 billion into non-U.S. stock funds this year.

Money-market funds have had withdrawals of $873 billion since the beginning of 2009 as interest rates have stayed close to zero.

–Editors: Christian Baumgaertel, Larry Edelman.

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