Despite strong year, individuals pull back on stocks

Jeff Horwich Oct 8, 2012

After a brief uptick, the percent of households owning stock is back down to where it was at the start of the financial crisis, according to new numbers from the Investment Company Institute. Basically, investors are getting cautious even as stocks have something of a banner year.

Allan Sloan, senior editor at large at Fortune Magazine says that in these uncertain times investors without much experience or profressional resources should buy into an index fund, “on average an index fund will do better than an average person will or an average mutual fund will.”

These days investing feels like a riskier proposition for individuals, “In 1999 and 2000, I saw the handwriting on the wall — everyone and his brother was out trading — and I knew that couldn’t last,” says Sloan, “but now you have the opposite because people have been scarred twice in the last ten years by huge drops.”

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