Zweig: Retail Investors Disgusted with the Stock Market?

Kenster1_GlobalValue

When Will Retail Investors Call It Quits?

http://online.wsj.com/article/SB10000872396390443545504577563511537138938.html

If small investors needed any more reason to be disgusted with the stock market, they got it Wednesday.

At 9:30 a.m., the broad market averages like the Dow Jones Industrial Average were placid as investors held their breath waiting for the afternoon announcement on interest-rate policy from the Federal Reserve. But beneath the macro-calm was micro-turmoil, as nearly 150 stocks traded on up to 20 times their normal volume-and many fell 10% or more in price in a matter of seconds after the market opened for trading, before quickly stabilizing.

So much for the reassurances from regulators and stock-exchange officials that a repeat of the "flash crash" is impossible. Wednesday's tumble wasn't quite as scary as the nearly $1 trillion drop of May 6, 2010, but it conveyed the same sense of markets spinning out of control and trading machinery going mad.

Investor

I bet most retail investor is not aware of this event. I would not place this one way too high.

hank

Agree with Investor - but is there some classic irony here? Have any of these investors looked at following over past few years? - U.S. equities up about 2X, treasuries up, high-yield up, gold up. (Yep, housing's in the dumpster & can't earn ##!!* in cash.) Don't mean to distort - realize Zweig's referring to market regulation. Just saying there's been opportunity for nice profit in many areas. And these folk probably ain't complaining when borrowing $$ for houses & cars at 2 - 3% ... BTW - John Bogle on cnbc today addressed the trading issue. Feels it only affects traders & of no consequence to long term investors. Sees equity markets as fairly valued & continues to advocate significant exposure. Also, advocated a "transaction tax" of a few pennies per trade to deter rapid trading.