I agree with this. We have seen this in our clients. It is not that they are averse to stocks, but their expectations and willingness to throw "all in" to equities has been altered. They are much more wary and more open to risk mitigation than in the past. They really are more tolerant of sub-market returns if it means that they are experiencing less volatility and feel that they are reducing their risk. 2. "Several generations were weaned and in fact grew wealthier believing that the pieces of paper representing 'shares' of future profit were something more than a conditional IOU that came with risk."
I believe that this is clearly the case with individual investors. We have seen this with some of our older clients and with the parents and grandparents of our clients. They had very long-term positions in certain stocks that they were attached to. Some have very beautiful and meticulous hand written ledgers that track each stock transaction. But we don't see this attachment with our younger clients. And frankly I think that is probably a good thing. I believe that we don't see the attachment because people don't have faith in corporate culture anymore. In many cases, corporate culture has shifted from more of a focus on long-term shareholder value, as I believe was prevalent for our parents and grandparents, to being more about rewarding executives at the expense of shareholders and workers. Just look at executive compensation relative to that of an average worker and look at the ridiculous levels of compensation paid. I don't begrudge well-paid executives - let them make millions or tens of millions - if they deserve it. But a culture where an executive comes in, works for nine months, then gets canned or quits and still walks away with millions does not instill a long-term investment mindset in shareholders, not to mention employees.