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Where Have the Mom & Pop Investor Gone?

Posted By Barry Ritholtz On August 19, 2012 @ 9:00 am In Apprenticed Investor,Investing,Psychology | Comments Disabled

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My Sunday Washington Post Business Section column is out. This morning, we look at where the mom and pop investor have gone and why.

The print version had the headline “Where has the mom-and-pop retail investor gone?“, while the online version is merely “Where has the retail investor gone?.”

Here’s an excerpt from the column:

“Lots of folks are wondering what happened to the Main Street-mom-and-pop retail investors. They seem to have taken their ball and gone home. I don’t blame them for feeling put upon, but it might be instructive to figure out why. Perhaps it could even help us determine what this means for risk capital.

We see evidence of this all over the place: The incredibly light volume of stock trading; the abysmal television ratings of CNBC; the closing of investing magazines such as Smart Money, whose final print issue is on newsstands as it transitions to a digital format; the dearth of stock chatter at cocktail parties. Why, it is almost as if America has fallen out of love with equities.

Given the events of the past decade and a half, this should come as no surprise. Average investors have seen not one but two equity collapses (2000 and 2008). They got caught in the real estate boom and bust. Accredited investors (i.e., the wealthier ones) also discovered that venture capital and private equity were no sure thing either. The Facebook IPO may have been the last straw.

What has driven the typical investor away from equities . . . ?”

I come up with the 10 answers, which you need to go to the full column [2] to see  . . .

 

click for giant version

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Source:
Where has the retail investor gone? [2]
Barry Ritholtz
Washington Post, August 17 2012 
http://www.washingtonpost.com/business/where-has-the-retail-investor-gone/2012/08/17/9a915eee-e7cf-11e1-936a-b801f1abab19_story.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2012/08/where-has-the-mom-pop-investor-gone/

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[1] Image: http://www.washingtonpost.com/business/where-has-the-retail-investor-gone/2012/08/17/9a915eee-e7cf-11e1-936a-b801f1abab19_print.html

[2] full column: http://www.washingtonpost.com/business/where-has-the-retail-investor-gone/2012/08/17/9a915eee-e7cf-11e1-936a-b801f1abab19_story.html

[3] Image: http://www.ritholtz.com/blog/wp-content/uploads/2012/08/mom-pop.png

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