My Comments: All this in spite of the fact we are in the middle of a secular bear market. One which is likely to take at least three more years and two large sell-offs before we can declare we are now at the start of a secular bull market.

The last secular bull market ran from 1982 to 2000 and it was very difficult NOT to make money in the markets. We’re not there yet but we will be. Some of this is happening because there are trillions of dollars sitting in cash; some of it from the bailout of banks in 2008 and 2009 that is still just sitting in cash.

By Warren S. Hersch

Stock and bond fund investors have enjoyed this year more than $1 trillion in asset appreciation, helped by strong stock fund total returns, according to a new report from New York-based Strategic Insight.

The research reveals that investors enjoyed total average returns of more than 12 percent from January through October and total bond fund returns averaging nearly 8 percent over the same period.

Asset appreciation, as well as net inflows to bond and stock funds (including exchange-traded fund flows) are projected to exceed $400 billion for all of 2012. This result, the report states, would make 2012 a near-record year for the expansion in asset under management for the U.S. mutual fund industry (second to 2009 when asset gains jumped $2 trillion from a depressed level as markets rebounded strongly).

In October, the survey reveals, net inflows to bond funds reached $30 billion. Bond funds are projected to amass more than $300 billion in net inflows for the full year, exceeding 2010 and 2011 pace.

Equity fund net redemption were $15 billion. ETFs investing in stocks experienced also modest redemptions of $2 billion in October, following inflows of $38 billion during September, their highest monthly take in four years.

The survey indicates that ETF products benefitted from $3 billion of October net intake, bringing total ETF net inflows (including ETNs) to nearly $140 billion for the first 10 months of 2012, exceeding the full-year gain in each of the past three years.

Outside the U.S., ETFs gained $45 billion to date. Globally ETF net flows in 2012 should exceed $200 billion, the survey states.

Target date funds attracted $5 billion in net flows during October, increasing YTD net intake to $45 billion.

“This year target date products are on track to rival the annual net flows record set in 2007 of $58 billion,” says Bridget Bearden, head of Strategic Insight’s Defined Contribution and Target Date funds practice.

Money-market funds moved into net redemptions during the month of $8 billion, bringing redemptions in such funds to nearly $144 billion in 2012.