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The Next Phase of the Bull

I devoted a section of my Weekly Strategy Session this past weekend to the very subject of the various stages of a bull market.

This piece in The Wall Street Journal by Simon Constable supports the idea of a changing phase.

Are Mom and Pop Heading for Wall Street?

Like the host of “The Price Is Right” TV game show, Wall Street is saying “Come on down!”

Investment professionals are anticipating an influx of income- and growth-hungry mom-and-pop “retail” investors into the stock market this year—especially as the economy picks up and pressure grows for interest rates to start rising.

“The key is that equities have been hated for so long and the negatives are largely well known,” says Barry Ritholtz director of research as New York-based financial-services firm Fusion IQ. “Positive data would be an upside surprise to the bulk of investors.”

For years, individual investors have fled stocks in favor of bonds or money-market funds. And who can blame them after the financial crisis crushed share values in 2008 and early 2009?

From April 2009 through now, mutual-fund investors sold a quarter trillion dollars in stock funds, according to recent data from the Investment Company Institute.

Ironically, that selloff coincided with a period of stellar performance in stocks—when the Dow Jones Industrial Average jumped more than 60%.

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One comment

  1. charlie

    Euphoria is coming. Maybe 2014 will be the year for the bears.

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