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Investors' lack of trust in the stock market during this four-year rally to record highs can be found in two data points: Fund flows and trading volume.

From 2008 through 2012, individual investors yanked about $153 billion from U.S. stock mutual funds and exchange-traded funds, according to data from mutual-fund tracker Lipper, while putting much of that cash to work in the bond market. Only recently have mom and pop started dipping their toes back into stocks.

Meanwhile, equity trading volume has been in decline for years. It peaked in early 2009, right as the market was hitting its financial-crisis lows. Despite a few blips higher here and there (i.e. the summer of 2011), trading volume has been trending lower.

Both trends illustrate crumbling confidence in stocks despite the market's relentless push toward all-time highs. The volatile swings associated with both the housing and tech booms and busts over the last 12 years have translated into a broader loss of trust in the stock market. Recently, the May 2010 flash crash, the Facebook (FB) IPO debacle and the trading lapse that roiled brokerage firm Knight Capital Group have made people skeptical of the way markets operate.

Only recently has the retail investor started coming back to stocks, although the worry is with the market at record highs, the little guy could potentially be "buying high."

Investors poured $34.2 billion into stock funds and ETFs in the four weeks through Jan. 30, their biggest four-week influx of cash since 1996, according to Lipper. That is more than the net pick-up for all of 2012.

For the week ended Feb. 27, about $800 million was injected into old-fashion U.S. stock mutual funds, a proxy for individual-investor activity. That marked an eighth-straight week of inflows, the longest such stretch since March 2011, according to Lipper.

But as money has been steadily moving into mutual funds this year, inflows into exchange-traded funds have faltered after a strong early-year showing.

That could possibly be explained by the fact that ETFs often attract a hefty dose of "hot" money that flows in and out from traders and hedge funds. Mutual funds, though, get more from mom and pop.

Investors withdrew $3.4 billion from domestic ETFs in the latest week of data, Lipper says.

Meanwhile, trading volume still remains anemic. Average daily New York Stock Exchange trading volume this year is about 3.6 billion shares, according to WSJ Market Data Group. Only 3.4 billion shares changed hand in NYSE composite volume on Monday.

Signs are picking up that the little guy is coming back to stocks. With the Dow at new highs, the question is whether mom and pop have arrived too late to the party.

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