A CNBC article from today reminds me that, "
America Hates Wall Street" and one from the WSJ exhorts, "
A new form of madness grips investors" which are about Americans' distaste for the stock market.
These types of stories are indicative of the fear that still grips the American public when it comes to Wall Street. I guess it's understandable because during the 2007-2009 crash, the DOW dropped from 14,279.96 all the way down to 6,440.08. I traded through those days so I know there was irrational trading going on, lots of fear, and a feeling amongst the rabble that the end of America was upon us. Crazy right? Yet, here we are in 2010 and the Dow's recovered all the way to
11,113.91 but folks are still fearful.
That's why po' folk will never get ahead. They should've been buying with both hands and both feet when the market dropped like a stone in 2008 - mom and pop investors should've been stampeding into the market when Pfizer was $11.62 on March 2009 and GE had dropped to $5.87. Yeah, I know GE is a hedge fund in drag (Thanks, Cramer) but c'mon now. GE has survived wars, turmoil, and recessions before and it's not going out of business.
So yeah, the social class strata in America is going to stay the same for the next hundred years because of fear and greed. It's as simple as that. When the market dives, Joe Sixpack becomes fearful and sells near the bottom only to watch the market bounce back again. However, he doesn't buy when the market climbs - he stays out because of a fear of being whacked again. That's why Joe will never ever become wealthy or be rewarded by the market.
Joe Sixpack will probably buy when the DOW's at all time highs in the next few years when prices are dear. A powerful bull market is upon us but the majority of American's won't benefit from what's coming because their fear outweighs their greed at precisely the wrong time.
