Mutual fund investors pulled $26 billion out of stock funds in July, the Investment Company Institute (the fund industry trade group) says. That's a net figure: we actually put in put in $108 billion, exchanged in $17 billion. We just withdrew $26 billion more than that.

To have any net negative month is peculiar. Think of all the money that just flows automatically into stock fund in retirement accounts. In June we collectively took out $5 billion. Just back in May we were putting in net $16 billion. (April was up $16 billion and March down $10 billion).

What's strange about these numbers is that we're pulling money out when the market isn't so bad. July, when we dumped stock funds, the S&P was down about 1%. So far this year we've actually pulled out $47 billion. By this time last year we had added $97 billion to stock funds. Meanwhile we're still putting money in hybrid and corporate bond funds, just not as much as last year.

If this isn't the typical story of investors getting spooked by short-term prospects, what is it? I think we all are getting nervous about the economy in the intermediate future, like the next five years. Second, maybe we're seeing the first impact of the baby boomers retiring. If they aren't pulling the money out to live on, they may be shifting it out of stocks or funds altogether.

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