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Nationwide Financial surveyed potential investors with at least $100,000 in investible assets and found that 83% fear another financial crisis, while 62% are afraid of investing in stocks. “We were pretty surprised that people are more afraid of investing than public speaking and dying,” Michael Spangler, president of Nationwide Funds told Investment News. “There doesn’t seem to be much understanding of the recovery. There was a double digit return on the equity markets in 2012.” 58% of those surveyed said they fear death.
Josh Peters, a strategist at Morningstar said one of the biggest behavioural mistakes an investor looking for income can make right now, is listening to Wall Street wisdom.
“I think for people who are looking for income, the biggest mistake he can make is listen to the current Wall Street received wisdom, which is that the dividend trade is over. It amazes me how quickly people will seize on this idea that you only buy high-yielding stocks if the economy is getting worse or if interest rates are going down, and then you bolt and you sell these great companies with their great dividend yields as soon as times get better or interest rates go up. That’s not what these stocks are about.
“These stocks are not, in fact, at all about Wall Street; they’re about you, because you’re getting your cash earnings directly from the company through those dividend payments. These companies can help you meet your financial objectives whether you’re beating the market right now in this current month or current year, or not. …So, what you want to do is stay away from this idea that it’s a competition, that somehow investing is a game you’re playing against other people that you have to win. It’s a journey and the destination is actually being able to meet your financial goals.”
Strategists at Deutsche Bank pointed out that “The ‘taper tantrum’ is over: markets have retraced much of their post May 22 sell-off, with US equities reaching fresh all-time highs.”
Quarterly Statements Have Brought Losses To The Attention Of Bond Investors (The Wall Street Journal)
Investors with fixed income portfolios have begun ringing their advisors about the bond selloff in June which is showing up in their quarterly statements, according to the WSJ. “Even though you consistently tell them they’ll go down when interest rates go up, they just have to be reminded of it,” Larry Carroll of Carroll Financial Associates told the WSJ. “I just don’t think it’s very intuitive to them.” Some firms have moved to make portfolio’s less rate sensitive, while others say talk of alternative investments is on the table now.
SAC Capital Is Indicted By A Federal Grand Jury (Business Insider/CNBC)
SAC Capital Advisors was indicted by a federal grand jury in New York on criminal charges of insider trading on Thursday. Steve Cohen’s SAC has been charged with four counts of securities fraud and one count of wire fraud.
The SAC has since responded to the charges (via CNBC): “SAC has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously. The handful of men who admit they broke the law does not reflect the honesty, integrity and character of the thousands of men and women who have worked at SAC over the past 21 years. We will continue to operate as we work through these matters.”
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