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BALTIMORE ( Stockpickr) -- There's no two ways about it: Investors hate stocks right now.
But all of that hate could help fuel a market rally that sends the
Dow to 55,000. Don't believe me? Look at the numbers.
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Investors hate stocks so much that Mr. Market is losing ground to the Mega Millions as a viable retirement plan. According to an old and oft-quoted study by Primerica, close to a third of Americans already believe that the lottery is a better way to earn a retirement nest egg than investing in the stock market. But now, more and more investors with long-term time horizons are losing faith in stocks too. Research done by MFS Investment Management says that 40% of people ages 18 to 30 admit that they will "never feel comfortable investing in the stock market."
That's not a comforting statistic for people who already own stocks.
Today, stock holdings as a percentage of all the assets held by mutual funds are lower than they've ever been. And investors continue to pull cash out of equity funds by the fistful.
The most damning evidence that investors hate stocks right now doesn't come from what folks are doing about their stocks, it comes from what they're not doing: buying them.
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And it's largely because investors have no clue about what's actually going on in the market. According to a survey from Franklin Templeton, 66% of investors thought that the
S&P 500 declined in 2009; the big index actually climbed 26.5% on the year. 48% of people thought that the S&P dropped in 2010, when it really jumped 15.1% higher. More than half of investors still think that stocks dropped in 2011, when they actually just churned sideways.
as I've been harping on this year, even though S&P has climbed around 13% since the first trading day in January, investors are more anxious about stocks than ever before.
But all of that hate mail investors are sending to stocks is actually a good thing. So
contrarian investors should be taking note of what's going on all around.