Even with high unemployment and looming fiscal cliff, the U.S. stock market is steaming ahead. The just ended third quarter results prove this. The $3.9 trillion strong U.S. diversified-stock funds that contain 7,857 funds gained 5.29 percent in the third quarter and 25.5 percent gain for the last 12-month period. Meanwhile the bond funds gained 2.48 percent for the quarter gaining 8.33 percent for the last 12-month period.
One clear winner at this time is the bond funds. People who are looking for safer investment options in light of the looming fiscal cliff, poured more money into bond funds during the third quarter in spite of less than attractive returns. Just in the month of August, bond funds took in $32.4 billion continuing 12 straight months of inflows while the equity market lost $13.5 billion continuing 16 months of outflows.
One big reason is the steady income without taking up lots of risk. The QE3 which was introduced by the Feds are pushing new money into commodity-related funds that are investing in precious-metals and energy. Another beneficiary even with doom and gloom forecast is European funds. All European funds rose 8.77 percent within the quarter delivering 19.38 percent for the past 12-month period.