People Still Don't 'Get' The Stock Market
After a rough start, 2009 turned into a great year for the stock market. Too bad many investors missed it, and maybe they wouldn't have if they really knew what the story was.
According to a survey of 1,000 people by Franklin Templeton Investments, 66% of respondents believed the stock market was either down or flat last year. Of course, the major indexes were neither. The Dow gained 18.8%, the S&P 500 rose 23.5% and the Russell 2000 jumped 25.2% in 2009. And many overseas markets did much better.
"The market decline of 2008 and early 2009 is still fresh in investors' minds and is stifling their willingness to invest in stocks," said David McSpadden, senior vice president of Global Advisory Services for Franklin Templeton Investments. "We believe that if investors focus on the longer-term opportunity provided by equities, the case is very compelling, which is one of the reasons we as a firm believe strongly in the value of working with a financial advisor. The misperception that exists right now is translating into a lost opportunity for people working to build their savings."
The survey found that 57% of Americans believe that stocks are too risky to invest in right now, versus 39% who see stocks as a solid investment opportunity. Evidently, 18- to 34-year-olds had the bejeebers scared out of them because that's the age group most likely to view stocks as too risky.
Correction
The entire hedge fund universe of about $1.4 trillion pales next to the $30 trillion for traditional assets, and even the biggest hedge funds-which are about $25 billion to $30 billion-would be small funds for a lot of fund families, says Jon Sundt, president and CEO of Altegris Investments. In the article "An Alternative World" (April 2010), Sundt was misquoted as saying the hedge fund universe was about $1.4 billion and that the biggest hedge funds were about $25 million to $30 million.