Brett Arends' recent column in the Wall Street Journal discusses the Cult of Equities, or as Arends describes:
the naïve and euphoric belief that the stock market offers a one-way ticket to wealth: "riches for all."
Arends discusses the possibility that a generation of investors--both professional and retail--may be starting to realize that stocks are to be cautiously considered for a portion of one's portfolio rather than serving as the dominant asset class.
Market volatility is likely a driving factor in the shifting sentiment. While the U.S. market is only down 14% over the past year, the fact is that many investors likely sold when the market was at its lows.
As Arends indicates, U.S. investors had $5.6 trillion invested in equity mutual funds a year ago. Today, that figure is down by nearly 25% to $4.4 trillion.
Source: Wall Street Journal
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