I don't have figures for the macro level. I can speak of my social circle though. (I'm talking about a very small sample here
well, since a small sample is not as good as a large sample, why not consider some macro facts:
* mutual cash fund levels would need to more than double just to reach the average level over the past 30 years
* most individuals invest in the market through pension funds or equity mutual funds. last year the latter experienced their first net outflows in over a decade. but the amount was just $27 billion, which is only about 1% of assets. this contrasts to the hundreds of billions investors poured into these funds in the bubble years.
it is hard to say investors are avoiding stocks when they have only withdrawn 1% of assets from stock funds, which themselves have very low cash level (indicating the managers are bullish and also not worried about withdrawals causing a cash crunch).
if at some point individuals start to withdraw a more meaningful sum of money, such as 10-20% of assets (which is by no means inconceivable, and is in fact a given once boomers start to retire), the market will not respond kindly.
* SPX PE in 2002 was 30, or more than double the long-term average
* SPX dividend yield is less than half the long-term average
* market cap as percentage of GDP is STILL higher than at any previous market peak, including 1929. since 1995 market cap as % of GDP exploded, then receded following the bust, but is still WAY above long term average. it could fall by half. |
