NYT: Equities Culture Lives On

Friday, 16 Nov 2012 08:44 AM

By Dan Weil

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In light of the withdrawal of almost $440 billion from stock mutual funds since January 2008 and the decline of stock market volume in recent months, some investment luminaries have concluded that stocks are an asset of the past.

“But a look at the big picture shows that Americans haven’t really taken much out of stocks at all,” according to The New York Times.

Investors still have more than $5.7 trillion parked in stock mutual funds, according to Investment Company Institute data cited by The Times, and almost $880 billion in stock-centric exchange-traded funds.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

Financial advisers say their customers continue to rely on stocks to provide the returns they need to help them live comfortably in retirement.

Stocks have some good things going for them, such as reasonable valuations and rising dividends, advisers point out.

And low interest rates make investing in stocks a no-brainer, many advisers say. The 10-year Treasury note has a negative yield after inflation.

“If your time frame is 10 years or more, you’re better off in stocks,” Adam Scott of Argyle Capital Partners tells The Times.

The Standard & Poor’s 500 has dropped 5.3 percent since President Barack Obama was re-elected last Tuesday amid fear about the fiscal cliff.

"[There is] uncertainty of whether we're going to have a functioning government going forward,” Troy Logan, senior economist at Warren Financial Service in Exton, Penn., tells Reuters. “That is a weight that sits on markets right now."

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

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