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Pastimes : Ask Mohan about the Market

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To: edward miller who wrote (13696)2/1/1998 1:56:00 PM
From: Tommaso  Read Replies (2) of 18056
 
Here's something that has often been noted:

Although it hasn't yet happened to any great extent, except very briefly during the October downspike, much of the money that is in retirement accounts invested in stocks can be switched any time into bond or money market funds. With the low cash balances in most equity funds, only a modest shift in mood is needed to effect a large decline in equities. Only ten percent of the nest-egg-building public needs to decide to switch out of stocks, or only twenty percent needs to decide to switch half out of stocks, to set off a big decline in the markets. The amazing thing is that it hasn't happened yet.

Seldom has there has there ever been quite the lack of caution--on the part of banks as well as many businesses and many persons--about money as there is right now.
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