Hi James, re: Microsoft, maybe this is simplistic, but all the "little old lady" investors I know own Microsoft, for the reasons that Peter Lynch and the Beardstown ladies suggest, buy what you know, buy big names. My sister owns Microsoft and Coke, on the theory that they will always be in business, making money during her lifetime. It's a known quantity. There are thousands of stocks, thousands of mutual funds, and the stocks in the Dow have been around long enough to have had very public ups and downs, but Microsoft has never gone down. Yet. And, the company does keep making money.
I don't know if you are aware that the United States Government's retirement plan, FERS, which invests in stocks, invests in, basically, as I understand it, the S&P500. Talk about artificial inflation of valuation. Every bi-week, like clockwork, Uncle Sam has to buy a huge chunk of the S&P500. Maybe they spread it out, I don't know. THAT'S got to make every big corporation in the USA want to be in the S&P 500! (Maybe that helps explain merger mania?) Open season for Federal employees comes, I think, only twice a year (not sure, maybe more, but they can only change asset allocation during open season.) So, that money keeps coming in like clockwork. |
