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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: accountclosed who wrote (37445)	11/24/1998 11:39:00 AM
From: Tommaso	Respond to of 132070

As I and many others have said many times, one of our mantras, the experience of stock investors for the last 24 years has been on the whole very happy, especially for people who simply bought, bought, bought, and held via retirement funds. I do think, though, that a deeper and more prolonged decline than what now looks to most people as a buying opportunity (our recent 20% roller-coaster) might gradually pry these investors loose from their equity commitments. After the inflationary experience of the 1970s and early 1980s, though, people want to hold stocks somewhat with the same tenacity that people held onto savings accounts for 20 years after the Great Depression. In particular, just as soon as a year-to-year comparison goes negative, there should be shifting of some new money, at least, to bonds and money-market accounts--and that should accelerate and prolong the decline. The new money going into equity mutual funds since last summer has already slacked off a good bit from previous years. It must have turned back up to produce the latest rally.

To: accountclosed who wrote (37445)	11/24/1998 11:51:00 AM
From: yard_man	Read Replies (1) \| Respond to of 132070

But how big is that as an overall part of the pie? I haven't seen any statistics. Isn't there still a substantial part of financial assets controlled by a relatively few very wealthy entities and individuals. There are also foreign investors which are sensitive to the direction of the exchange rates. beyond this -- even for the common middle to middle upper class folks -- many have "discretionary" investments separate from their IRA funds which can move in and out very rapidly. I suspect what you are saying is true about IRA's. Folks make few changes for a hiccup like we had -- but I think that part of the holdings does not represent the majority of stock holdings, right? If we do retest those lows again -- I think some will get to thinking, at least.