TITLE

A Risky World

AUTHOR(S)
Miller, Karen Lowry
PUB. DATE
March 2004
SOURCE
Newsweek (Pacific Edition);3/15/2004 (Pacific Edition), Vol. 143 Issue 11, p34
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
This article discusses the investor apprehension about a booming stock market. In the United States, the pace of growth in the economy, productivity and stock prices is back up to the levels of the late 1990s, and yet there is no talk of miracles in the economy, or "irrational exuberance" in the markets. Something basic has been lost, and not only in the United States. In the 1990s, the old faith that blue-chip stocks were the best way to build wealth and guarantee a comfortable retirement gave way to the mass delusion that tech stocks were a sure way to become a millionaire. The investing minority became a majority in the United States. Investors are re-entering the market with eyes more or less open to the risk. During the past 12 months, the markets are up 30 percent in New York and Tokyo, 60 percent in Frankfurt, and yet a dim foreboding reigns. Why? A turning point may be at hand. Market history tells us that boom decades are followed by slow decades, and there are already signs that liquidity may be tightening. This exposes a basic clash of interests between fund managers and their clients. Professionals are still under heavy pressure to produce returns, and in some cases pension funds and life-insurance companies are expected to meet a minimum return. These powerful groups are pushing managers into ever-more-complicated products, while their clients often want it all: high returns and low risk.
ACCESSION #
12541293

 

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