Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: jimcav who wrote (3419)	3/8/2001 4:53:41 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

And I guess putting money in the banks during a period of hyper-inflation would still equate to "savings"? The fact is that people are doing something with their money OTHER than spending it on consumables. The reason people put their money into stocks is because that's how most of their 401K/IRAs are set up, and where they've received the most return. Furthermore, their 401K options are generally limited to stock funds or bond funds, and not individual equity/debt instruments. And since stock funds have normally outperformed bond funds, that's where they have been devoting their contributions. For example, if I have a 401K, I have a limited selection of funds that I can place that money into. I'm not generally permitted to self-direct my 401K and purchase individual stocks or bonds. Thus, I'm held hostage to the managerial capability of a particular fund manager. And that fund manager is held hostage to redemptions or contibutions. Hell, in most 401K's people can't even purchase bear funds or gold. Thus, the current retirement system is heavily skewed to stock funds. So they ask, "what should I buy, stocks or bonds?.... "Well, stocks have been outperforming bonds and I'm a long-term holder since I don't have to retire for 10-20 years, so I'll buy stock funds".... So if people start all buying bond funds, or in money market accounts, will that satisfy your definition of "savings"? It should.. because that money is coming in, and being augmented by corporate contributions, each and every month and quarter (depending on the specific plan). People are saving.... They may not be saving in the best asset area... But they are saving. Regards, Ron