Let me offer a more straightforward explanation of why investors have left the stock market: it has been a losing proposition. An entire generation of investors hasn’t made a buck.
“The cult of equity is dying,” Bill Gross, the founder of Pimco, wrote in his monthly letter last week.
“Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well,” Mr. Gross wrote. His letter came after he had sent a Twitter post that read: “Boomers can’t take risk. Gen X and Y believe in Facebook but not its stock. Gen Z has no money.”
Consider this: Of 878 students at 18 high schools across 11 different states surveyed by the Financial Literacy Group, three-quarters of them said they agreed with this statement: “The stock market is rigged mostly to benefit greedy Wall Street bankers.”
- Why Are Investors Fleeing Equities? Hint: It’s Not the Computers (dealbook.nytimes.com)
- Bill Gross: We’re Witnessing the Death of Equities (investmentwatchblog.com)
- Why Bill Gross is Wrong: Innovation and Long-term Returns on Equity (innovationandgrowth.wordpress.com)
- Equity Returns and the Size of the Economy: Bill Gross Makes a Distressingly Common Error… (delong.typepad.com)
- Bill Gross: “The Cult Of Equity May Be Dying, But The Cult Of Inflation May Only Have Just Begun” (zerohedge.com)