Surprise! Mutual Funds Aren't Driving The Market

Popular theory holds that they've been the yeast in the Dow's rise. Not so

Deutsche Morgan Grenfell Chief Economist Edward E. Yardeni could not be more confident about his prediction for the U.S. stock market: "Dow 10,000 by 2000," he boldly states. To Yardeni and a vast array of other market commentators, the reason for the market's strength can be boiled down to two words: mutual funds. "Mutual-fund investors are doing to stocks in the 1990s what they did to real estate in the 1980s, sharply marking up prices," says Yardeni.

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