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Small investors make a modest come-back

Dec. 27, 2013 at 2:10 PM   |   Comments

NEW YORK, Dec. 27 (UPI) -- Money flowed modestly into U.S. stock funds in 2013, but some analysts question why small investors have not raced in to take advantage of the year's rally.

"The surprise is that people are only dipping their toes into a market that's up so much from its low," said Jeff Tjornehoj, the head of research for the Americas at Lipper, a market data provider, the Wall Street Journal reported Friday.

"You'd think people would get excited about that," he said.

U.S. markets are poised to absorb inflows of more than $60 billion in 2013, which is less than markets lost to outflows in 2012, the Journal reported.

This year is the first since 2005 that markets have posted a gain, with the year's total pushed by an additional $5.6 billion inflow in the week ending Wednesday, Lipper reported.

In the years in between, 2006 to 2012, investors pulled $451 billion from stock mutual funds, including $126 billion that was pulled out in 2012, the Journal said.

"It's been a slow process for me to start investing more of my money in stocks," said Jordan Strauss, 36, a photographer from Los Angeles, who has increased his stock investments recently.

"I work way too hard for my money to put it in something that all of a sudden is going to tank because of something I have no control over," he said.

Analyst said the sting of the 2008 downturn has made small investors wary.

"Investors still are apprehensive. The magnitude of the losses during the financial crisis just stayed with people," said Michael Loewengart, director of investment strategy at E*Trade Financial Corp.

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