I get a magazine called Stocks. In last week’s stock magazine there was a short article on the investing habits of 2,300 private people worth a total 60 million USD. This study was commissioned by Barclays Wealth.
What was interesting in this study is that the people willing to take on the most risk were in developing nations. In the middle east people wanted 43% more risk and in Eastern European and Asian countries people want to buy more real estate. Switzerland, where I live, 40% wanted to take more risk.
What was interesting is that the remaining industrial world wanted to avoid risk. And you want to know who wanted to avoid the most risk? Youth! Youth wanted to move more into fixed income papers. This finding surprised the study because we would think that youth would be more willing to take risk.
Why are the youth so gun shy? Blame it on George W Bush! Seriously, if you go back to Jimmy Carter, each and every president came in and left their office with a higher stock market. The only president not capable of doing that in 8 years was George W Bush! When George W Bush came into office the S&P was at 1342! I am not spewing propaganda here, if you don’t believe me look it up.
Why are the Swiss and older generation to take on risk? Because times are not as bad as many would have us believe! Like today. Sell the rally, and buy later on! Many are saying, are we not in the same place again with Bear Sterns? And at that time we had a rally only to sell off. Folks that is FEAR…
For example, take a look at what happened to United Airlines. Dropped to 1 penny because a 4 year old story was dug up. Folks that is pure and nasty FEAR…
It is not that I don’t get FEAR, trust me I do. But I just ignore it, take a couple of deep breaths and move forward. You cannot have fear control you!