NYT: "One of the phenomena of the last decades has been the rise of the individual investor."
I say it was the change in the tax code, a change in the rules of retirement that began in 1974 and evolved into the 401(k) (or other retirement funds around the world). What caused this change? Employers saying that their employees' defined benefit (DB) retirement plans, paying a worker a paycheck for life, were too expensive and that they weren't going to pay any longer.
The rich lobbied Congress, and like magic, employees were turned into investors - regardless if they wanted to be investors or had any financial training.
Today, millions of investors have lost billions of dollars, and millions of workers won't be able to afford retirement.
NYT:"For a lot of ordinary people, the economic recovery does not feel real."
How can you feel good if you're out of a job or afraid of losing your job? How can you feel good if the price of your home - if you still own a home - has gone down?
If the NYT doesn't know the real reason why the little investors is in the stock market in the first place, we have very poorly-educated journalists. Why don't our schools tell kids that the rules of retirement changed in 1974? Why do journalists call it a phenomenon that small investors are in the stock market rather than what it really is, a conspiracy of the rich (COR)? Why do schoolteachers continue to bring in bankers and financial planners, agents of COR, to brainwash kids into saving money and investing for the long-term in stocks, bonds, and mutual funds?
The small investor knows they've been set up. They know that they're being screwed. They may not know how or why they've been set up - but they're not stupid. They're not just fleeing the market, they're running for their lives.
