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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Phil(bullrider) who wrote (13510)	9/5/1998 11:51:00 PM
From: peter michaelson	Respond to of 18691

Phil: The thinking goes that if people feel less wealthy due to market slump, then they will save more. Save more = spend less = lower corporate revenues = lower corporate profits

To: Phil(bullrider) who wrote (13510)	9/6/1998 6:22:00 AM
From: Gary R. Owens	Read Replies (1) \| Respond to of 18691

Phil, I have to take Peter's side. You stated: >Most of the people that put money in mutual funds do so with automatic deductions from their pay checks. I simply don't see the rate of deductions changing, especially when a lot of companies match contributions at a rate of between 25% to 100%. That is a definite return on your investment wherever the money goes from there. Although I think you're right that the rate won't change appreciably in the next few weeks, I think that overall, once the "average investor" starts seeing that they aren't making 20%+ anymore, they will redirect their contributions elsewhere. I am a more or less "average investor" and decided about 8 months ago to discontinue my monthly purchases into mutual funds. Berger 100, Berger 101, Janus Twenty, Janus Fund. What bothered me is the number of friends/aquaintences who were hadn't been contributing during the bull run and were intent on making up for lost time. These folks were asking me which fund to put their dough in because I had been relatively prosperous by investing for almost a decade. Guess they didn't know not to confuse brains with a bull market. Bottom line - I think people will pull back from their previous levels of fund investment but not until they start seeing some negative numbers on their statements during the next few months. regards, gary