After poor stock market performance over the past few years, many investors are holding on to cash. A survey by BlackRock ranks the reasons why people aren’t investing, and the results may be different from what you had expected.
Uncertainty about where to invest (37%)
Belief that it’s a poor investing environment (26%)
Fear of investing/losing money (23%)
Previous portfolio losses (8%)
Not applicable, have not pulled back on investment activity (6%)
Investors are not completely closed off to the idea of investing, but instead don’t know where they should put their money. One of the chief benefits of employing a relative strength strategy is that it provides the framework for allocating assets-thereby removing the biggest stumbling block to getting investors in the game.
How come LIBOR fraud, Flash Crashes, miniscule interest rates, companies like KCG able to go from solvent to nearly bankrupt in 40 minutes due to a screwed up (hacked?) computer system, MF Global theft, and managed money underperformance aren’t listed as reasons people don’t want to invest?