[lbo-talk] The myth of the populist stock market

Fernando Cassia fcassia at gmail.com
Tue Aug 9 03:29:33 PDT 2011


2004: The myth of the populist stock market http://www.csmonitor.com/2004/0108/p09s01-coop.html

"NEW YORK – Wall Street analysts are predicting another great year for the stock market in 2004, and Americans are again pouring their savings into stocks. Tens of billions of dollars have flowed back into equities since last summer. As the Dow and Nasdaq soar, more money is likely to follow. There are also signs of a revival of the '90s myth of the populist stock market -a myth in which Wall Street gives everyone on Main Street a shot at a better life.

Can Americans possibly fall once more for this nonsense? Maybe. The scandals of recent years, most lately in the mutual-fund industry, have done little to debunk the notion that Wall Street is geared toward ordinary investors and that stocks offer a universal path to wealth creation."

By 2010: In Striking Shift, Small Investors Flee Stock Market http://www.nytimes.com/2010/08/22/business/22invest.html?th&emc=th

"Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market.

Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute, the mutual fund industry trade group. Now many are choosing investments they deem safer, like bonds.

If that pace continues, more money will be pulled out of these mutual funds in 2010 than in any year since the 1980s, with the exception of 2008, when the global financial crisis peaked.

Small investors are “losing their appetite for risk,” a Credit Suisse analyst, Doug Cliggott, said in a report to investors on Friday.

One of the phenomena of the last several decades has been the rise of the individual investor. As Americans have become more responsible for their own retirement, they have poured money into stocks with such faith that half of the country’s households now own shares directly or through mutual funds, which are by far the most popular way Americans invest in stocks. So the turnabout is striking. "

---- So maybe there is hope that people are slowly _learning_ ?

FC



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