After a lackluster decade and the more recent quick market swings, the average retail investor has been disengaged with the equities market. Trading volume in stocks and exchange traded funds is lighter than usual as apathetic investors lay low.
Barry Ritholtz, chief executive of FusionIQ, a quantitative research firm, for The Washington Post points out that investors are “scarred and scared.” [VIX ETFs Keep Falling Despite Rally Doubts]
The S&P 500 is back around its 2012 highs while the CBOE Volatility Index, or VIX, reflects greater complacency within the markets, which indicates that investors seem to be incredulous about the current slow and painful recovery. [‘Most Hated Rally’ Lifts Stock ETFs for Sixth Week]
Investors witnessed a 57% plunge from the 2007 peak and 2009 bottom. Currently, markets are relatively unchanged since the 1999 dot-com era highs. The appetite for risk isn’t quite there, yet.
It wasn’t just the tech stocks that got blindsided. We are still in the midst of a real estate bust that started in 2006, although some are calling the housing bottom. After the recent financial depression of 2008, investors got rolled by another crisis from the Eurozone, namely Greece and the other troubled peripheral states.