Restoring investor faith and trust will be necessary for restoring the stock market. As consecutive bubbles have gone bust and the scandals from giant banks has destroyed retirements, financial reform has been unable to keep up with asset outflows. Should the trend continue, fewer companies will issue shares and less investors will put any of their retirement back into stocks. [The Latest ETF Data on Liquidity]
Since the start of 2008, domestic stock mutual funds, a common way for individuals to invest, were drained of more than $400 billion, compared with an inflow of $52 billion in the four years before that, reports The NY Times.
“A long-term peak in the S&P 500 is developing as the gauge diverges from other equity measures, meaning stocks are likely to decline next year,”RBC Capital Markets reported. [Why ETFs Appeal to Traders and Long Term Investors]
Tisha Guerrero contributed to this article.