Under protest AHHA offers up these pearls. Reply catalyst at bottom of this page including link to original article.
To: sixty2nds who wrote (14690) 9/6/2009 2:45:00 PM
From: ahhaha Respond to of 14691
If you must post this kind of useless stuff, I should discourage you by pointing out(as usual) that it's useless as you already imply.
For example, the author writes,
But those trends hardly constitute a stampede. At Vanguard, says Stephen Utkus of the Vanguard Center for Retirement Research, only 16% of 401(k) investors made any trades in 2008, barely up from 15% in 2007 and down from 20% in 2004. That includes rebalancing across funds to restore an asset mix to target levels.
"It is kind of striking," Mr. Utkus says. "We had the most drastic market decline since the Depression, we nearly had a total collapse of the global financial system, and all that caused most people not to do much at all."
After the Great Crash of 1929, individual investors abandoned the stock market for a generation. What keeps today's sitting bulls from running off?
"We had the most drastic market decline since the Depression". Is this true? According to what criteria? None that I can identify.
From my direct and intimate personal exposure to the stock market over the last 50 years, here is how I rank the sell-offs in significance or severity in either total effect or psychological effect.
'69 - '70
'73 - '74
'63
'82
'08
'01 - '02
'87
'63, '87, '08, were synthetic events not associated with recessions. I probably should include '55 and '59, but they would be at the bottom of the list and too far down in amplitude to note. You can't look at charts and understand the above. Indeed, you can't look at charts and agree with Utkus. Further, you can't look at the '29 crash and early '30s to get the right view either, nor can you compare the early '30s period with any other including the crash/depressions of the 19th century.
'69 - '70 is on the top because it represents a grand transition from the good times of an extended period across the '50s and '60s in general to the almost continual sturm und drang ever since. '69 - '70 came not from Vietnam war excesses but because experiments in Keynesian pumping during the late '60s ended up with the awful ratcheting upward of interest rates to tame the outcomes. This destabilizing introduced shocks into the natural business cycle which FED ever since has tried to control. The decade of the '70s, outside of all other effects like oil shocks, was dominated by FED trying alternatively to control the effects of their previous interventionism. The severity of '73 - '74, '82, '01 - '02, and '08, was directly due to some aspect of the result of interventionism.
we nearly had a total collapse of the global financial system,
Nowhere near it. Proof : gold and gold stocks sank like everything else, whatever the explanation for that.
and all that caused most people not to do much at all."
Corporations are more valuable than all forms of money because corporations are the only entities which create future value, however value is denominated.
After the Great Crash of 1929, individual investors abandoned the stock market for a generation.
After the 1907 panic individuals abandoned the stock market until the '50s. They only got involved during the '20s for the same reason people became enamored with RE in current decade, presumed cheap path to wealth. There were few investors involved with the '20s market.
What keeps today's sitting bulls from running off?
They believe in themselves and their need to go to work every day.
From: sixty2nds 9/6/2009 10:05:32 AM
Read Replies (1) of 14691
Why do Investors Sit Tight in 401(k)s? online.wsj.com
The author must be a havard grad. Maybe the author is youger than 40?
The reason people sit tight in 401ks is Conviction/commitment |
