Timothy Day: Unusual Stock Market Trends Reveal Lack of Trust Among Investors

PHILADELPHIA, PA, January 14, 2013

Referring to a new report from the Associated Press, The Washington Times suggests in a recent article that a major historic change is occurring in the stock market--ordinary, individual investors are continuing to pull out and sell their stocks. The article reports, "Defying decades of investment history, ordinary Americans are selling stocks for a fifth year in a row. The selling has not let up despite unprecedented measures by the Federal Reserve to persuade people to buy and the come-hither allure of a levitating market." While this may prove to be "the first time ordinary folks have sold during a sustained bull market since relevant records were first kept during World War II," some experts in the field of finance feel that the investors are the one's making the wrong decisions. Sharing these sentiments, Timothy Day, leading financial expert and economist, suggests that many American investors may have the wrong perceptions when it comes to deciding when to unload stock.

According to the article, this increasing uncharacteristic behavior is one that reflects a majority mistrust of the American government and its economy. In the article former financial analyst Andrew Neitlich explains his reason for selling, "You have to trust your government. You have to trust other governments. You have to trust Wall Street. And I don't trust any of these." Similarly, financial historian Charles R. Geisst of Manhattan College suggests that most investors have lost faith in the market. While Timothy Day explains these feelings are typical in times of economic fragility, these patterns are unique because in the past, most Americans have typically bought more than they sold during an economic downturn and subsequent recovery.

While the United States of America has endured the effects of the Great Recession and is currently experiencing steady economic recovery, the article notes that the overall effects of this unusual investor pattern could lead to slower economic growth in the future. Timothy Day responds to these risks by assessing the motivation of those who have sold. He concludes, "As small investors have been pulling an unprecedented amount of money out of U.S. equities, stock prices have risen over 100 percent since the market bottom of early 2009. Once again the individual investor is wrong. Contrary to popular belief, the best time to buy equities is during periods of great pessimism not great optimism, The level of money sitting on the sidelines as a result of investor fear and mistrust represents a vast amount of pent-up demand for stocks that will likely propel the U.S. equity markets to new heights in 2013."

ABOUT:

Timothy Day is a talented professional who has filled many roles within the professional world of finance and economics. As a respected individual within his career field, he is accomplished as an accountant, manager, transfer pricing economist and educator. Timothy Day has also provided extensive economic knowledge and support in relation to legal matters, multinational projects, and comprehensive financial analyses.