Big Investors Are Dropping Stocks Like Hot Potatoes

We all knew this day would come. The stock market has reached completely unrealistic levels, and it was only a matter of time before investors started getting out while the getting is good, which is exactly how most bubbles start to unravel. And now, that very situation is coming to pass.

Earlier today, Jill Carey Hall of Bank of America Merrill Lynch announced that their clients sold $4.1 billion in stocks last week. Coincidentally, this is largest sell-off that they’ve seen January of 2008. But more importantly, the bulk of these sales have been conducted by what she’s calling “institutional investors.” In other words, these are some of the biggest stock players, which often include insurance companies, hedge funds, banks, and pension funds. This sudden sell-off was just that. Sudden. According to Jill Carey “After three weeks of net buying, institutional clients’ net sales last week were the largest in our data history”

For whatever reason, most of the sales have come from financial and healthcare stocks. Maybe this is just a hiccup, but it looks like this bubble’s day of reckoning has finally arrived. The fact that these are major players doing the selling, tells you everything you need to know. These types of organizations are populated by two kinds of people. Those who are savvy investors, and those who are insiders that know things we won’t hear about until after the fact. When they start dumping stocks, you know the party is coming to an end.