Thursday, March 28, 2024 | Ramadan 17, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Investors undeterred by wild US stock market

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As the US stock market suffered its worst selloff in more than six years on Monday, Richmond, Virginia-based financial adviser Jamie Cox started preparing for a flood of client calls that never came. Out of more than 2,500 clients, only 15 people called or emailed to check in with Cox, who helps oversee $750 million in assets at the Harris Financial Group. None of them told him to take their money out of the market, he said, leaving Cox convinced that the 9-year-long bull market in stocks still has room to run higher. “This was nothing at all like the financial crisis” of 2008-2009, he said. “Most everyone seems to recognize that the economy is getting better and the tax cuts are going to be supportive of stocks.”


Indeed, financial advisers across the country say that the volatility in the US stock market on Monday, which left the Dow Jones Industrial Average down at one point by more than 1,500 points, has not yet curtailed the appetite by small investors to put money in the stock market.


Approximately 52 per cent of Americans own stocks either directly or through a mutual fund, according to the Federal Reserve. Those holdings help underpin the $5.3 trillion of assets invested in 401(k) retirement plans, according to the Investment Company Institute, a trade group.


Some advisers said clients asked them to add to the market on Monday, helping fuel the “buy-the-dip” mentality that has helped the S&P 500 avoid the 10 per cent drop known as a correction for nearly two years.


It is a different story for small and institutional investors who were exposed to obscure, leveraged exchange traded products (ETPs) linked to the stock-market volatility.


The S&P 500 was trading lower again on Thursday is now down slightly year-to-date after gaining nearly 6 per cent in January, its best performance for the month since 1997.


The SPDR S&P 500 fund, the world’s largest ETF, lost $66 million in investor outflows on Wednesday, after losing $17.2 billion over the previous 4 days. The fund brought in a record $19.8 billion in investor inflows in January.


Investors trading in their 401(k) retirement plans moved out of equities on Monday and Tuesday, but began buying back into stocks on Wednesday, according to the Alight Solutions 401(k) index, which tracks $200 billion in assets. — Reuters


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