Despite Tuesday’s record-setting rally, individual investors are still worried about sinking their cash into the stock market, Newsmax money columnist David Nelson says.
“They’re uncomfortable and you have to remember a lot of individual investors, they sold out probably close to the bottom in 2008,’’ Nelson told Steve Malzberg on Newsmax’s “The Steve Malzberg Show.’’
“It’s pretty difficult to put your money back in the market after a large gain like we had in the last several years. Even institutions, by and large, have not participated in the bull market we’ve had the last few years.
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Institutional investing is also not what it was in the past, either.
“A decade ago, institutions had about 50 percent of their money in stocks. Today, it’s probably only 25 percent and they’re probably being drained,’’ said Nelson, chief strategist for Belpointe Asset Management and a Moneynews contributor.
“We’ll see what happens with the individual investor. It’s going to be a while before they come back.’’
Nelson added that the Fed’s policies are a big part of the rally, which comes on the heels of sequestration.
“We can debate as to whether or not the Fed actions, what they’ve done, is it correct for America in the long run,’’ he said.
“But nevertheless they’ve done it, and they’ve made really stocks as an investment class probably the only place investors can put money right now. They certainly can’t put it into bonds.’’
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