Curious... from an EWI promo:
The Beginning or the End of a Bear Market?
Have wealthy stock market investors done any better than the average Joe who has money in stocks? Have the wealthy behaved differently during the market's decline?
The answer to both questions is, "Probably not," based on a survey reported in today's Wall Street Journal. This survey queried the top one percent of the wealthy (people with annual gross incomes exceeding $300,000 or a net worth exceeding $3.75 million), and discovered the following:
"About 85% of those surveyed said their portfolios declined in value since March 2000."
"The average decline was 17%."
"Their average asset allocation remains substantially the same as last year, with one-third in domestic equities..."
"Less than a quarter of respondents said they moved money out of stocks and into safer investments in the past year."
Keep that final bullet point in mind, because here's the shocker: Asked what they DON'T trust, the wealthy picked
Corporate financial statements (76%);
Analysts' stock recommendations (73%);
Management at publicly traded firms (68%);
Independent auditors (58%).
In other words, the vast majority of wealthy stock market investors have lost money in the bear market, and a strong majority DO NOT trust the entire layer of professionals who are supposed to INSPIRE trust in the stock market.
But ... more than three-quarters of these wealthy investors are STILL in the stock market, and HAVE NOT even changed their asset allocation.
Is it fair to conclude that these folks don't trust anything or anyone, except the stock market and themselves? More to the point, does this survey suggest the sort of psychology that prevails at the beginning or at the end of a bear market?
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