U.S. stocks have more than doubled since the financial crisis, but the middle class may not be raking in the gains, according to a recent article by the news service Reuters. Clinging to risk-aversion, economists say, could leave folks unprepared for retirement and widen the growing income gap between the rich and the poor.
What’s the cost of this lingering case of the financial jitters?
“Fidelity Investments found that individuals who had been investing for at least 12 consecutive years in their 401(k) plans but pulled out of equities in late 2008 or early 2009 had an average balance at the end of June 2012 of $167,000, compared with a $212,000 balance for those who didn’t,” Reuters reports.
Since last October, Standard & Poor’s has gained 28 percent, the Dow industrials 24 percent, Reuters notes.
“This is the most uncelebrated bull market in history,” Tony Ferreira, managing director at Cogent Research, which provides research and consulting for large fund managers, tells the news service.
“In the old days, people would be jumping on the bandwagon, but nobody’s chasing equity performance this time,” he says. “Many people are still scared to wade back into the water.”
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