Presented by Mark Phillips
The average individual investor has seen (some say caused)
their invested wealth suffered mightily over the past 20 years. The average
investor managed to underperform even money market funds over this period.
Richard Bernstein, former Merrill Lynch strategist who now heads his own
eponymously named shop, thinks this
outcome is largely due to persistently poor timing – or more specifically,
investors’ reaction to increased volatility. Simply put, they tend to run away
when things start getting chaotic.
With stock-market volatility trending higher in recent weeks, investors are again running away, Bernstein says, citing fund-flow data that shows investors have cut U.S. equity exposure for 13 weeks in a row.
“History suggests that the best investment opportunities are in asset classes that investors shun. We strongly feel investors’ ongoing fear of U.S. equities continues to offer substantial opportunity,” Bernstein says.
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