According to a recent survey by Bank of America Merrill Lynch, investors in America are turning away from US stocks at a level not seen since early in the financial crisis. The survey looked at 207 money managers who have around $600 billion currently under management and found that this sample had a 20% net allocation put into US equities – the lowest percentage seen since the start of 2008.
Have Stocks Lost Their Appeal Of Late?
Fund managers appear to be looking elsewhere for opportunities, for example, the S&P 500 has been at record highs of late, and investment in foreign markets and even other types of assets has been on the rise.
Fund managers aside, it seems that even casual investors and portfolio holders in the US have more choice than ever when it comes to where to invest and where to trade, and it is the stock market that is losing interest as people seek out the best markets and assets for them.
The foreign currency markets were something previously only really open to banks to invest in, however in the past decade or so, online forex trading platforms like forex.com have introduced it as something anybody can do – and learn how to do – from their own PC or mobile device. This has given those who want to get into some form of trading a very accessible option that simply doesn’t sound as daunting as the stock market.
To a casual or beginner trader, having to understand what is going on in different industries and companies to spot the best opportunities can sound a lot more complicated, time-consuming and boring than keeping up with current affairs and working out how macroeconomics might affect the currencies of a small number of countries. The ease and accessibility of forex – as well as the fact there are plenty of resources for beginners on the web – means it has a very low barrier to entry for new investors compared with stocks. The fact its popularity keeps on rising as stock investment in the US is lackluster suggests many Americans are choosing this option.
Another place investors now have as an option for placing their money is in cryptocurrencies – the most famous of course being Bitcoin. Bitcoin has shown itself to appeal to tech savvy investors in the 20-40 age bracket and performs especially well at times when there is a lot of uncertainty in other markets. It soared during the period last year when the US election and Brexit were causing fearful market sentiment all over the world, and has begun to be seen in financial circles as something of a new safe haven, much like gold has traditionally been. It is global and tends to remain unfazed by the events that will shake one stock market or conventional currency.
With access to more types of opportunities, it is perhaps no surprise that the biggest stock markets in America are losing out, and perhaps more indicative of how we think about investment shifting than anything else.
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