SAN FRANCISCO (TheStreet) -- Investors have good reason to be worried about the federal deficit but should also be wary of the stock market's rapid rise, a top Wells Fargo (WFC) executive said on Wednesday.
David Carroll, senior executive vice president and head of Wells Fargo's wealth, brokerage and retirement division sounded a word of caution about stocks, noting that the market has doubled in value at a faster clip than it has in over 50 years.
The volatility in stock prices since the crisis erupted - with the market falling nearly as rapidly at times as it has risen - led Carroll to sound a word of caution to investors.
"We're seeing a big and rather radical shift in flows out of fixed income - which we saw most of last year - and back into equities," Caroll said in an interview with TheStreet. "We think people need to be very thoughtful about that because the S&P 500 has doubled in less than 23 months, which is the fastest that it's doubled since the S&P 500 was compiled for the first time in 1957."Carroll, who was speaking to TheStreet about an investor-confidence index that's now sponsored by Wells Fargo, said investors have been shaken by episodes like the so-called "Flash Crash" last May and the European debt crisis, which occurred just as stocks were starting to stabilize. The Wells Fargo/Gallup Investor and Retirement Optimism Index, which launched on Wednesday, showed that the federal budget deficit is now tied at first place with unemployment among investor concerns. Of those polled by the partners, 71% said that the two issues were hurting the investment climate "a lot," followed by the price of energy, at 60%. Carroll said he wasn't surprised that the federal deficit was a concern, but was slightly stunned at how high it ranked among the worries of average investor. "Personally, I do think we all should be worried about the federal budget deficit," said Carroll. "I was surprised that it ranked where it did in the poll...I think you're seeing the good collective common sense of the U.S. taxpayer saying, 'Geez, if I can't afford too much debt, why can the government?'"
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV