NEW YORK — Someone must have sounded an all-clear signal on New Year’s Day because in January, after five years of fasting and penitence in the bond market, investors poured money into U.S. stocks.
But much of that money probably went into stock funds and exchange traded funds, not individual stocks. Though few statistics are available, there are many indications individuals have abandoned individual stocks as their preferred form of equity investing. Remember how people worshipped Cisco Systems CSCO -0.19% , Qualcomm QCOM -0.19% , and JDS Uniphase JDSU -2.07% back in the 1990s?
Now they’re buying target funds, index funds, and their close cousins, ETFs, instead of individual stocks. With one big, bright red exception, which we’ll get to later, individual stock investors may be a dying breed.
Nothing brought that out more starkly than an article last week in The Wall Street Journal, which dealt with the demise of investing clubs, that former pop-culture icon. (Remember the Beardstown ladies?) Read WSJ story (subscription required).
Investment clubs flourished in the era of do-it-yourself investing, when every man and woman was their own stock picker. Who needed professional managers when all the data was right at your fingertips? Especially when friends and neighbors could help each other find winning stock ideas.
Read More at Marketwatch . By Howard Gold.