>> It's been ten years since the 2008 financial crisis erased $16.4 trillion in assets from US households.>> In the short run, adjustments in the financial markets can be painful.>> And that pain is not forgetten. Americans still have not embraced the stock market with the same fervor as before.
Even though Wall Street has roared back with a nine year uninterrupted bull market, Americans hold fewer individual stocks and put less overall money into equities. Research from Goldman Sachs shows overall US households have $900 billion less invested in stocks than in 2007. Fidelity reports that investors have cut equity only funds from their 401(k) retirement portfolios from 64.7% to 52.4%.
Instead, prospective retirees now hold nearly a third of their assets in blended target-date funds combining stocks, bonds, and cash, that's more then twice the level a decade ago. One of the biggest shifts has been in fund management. So called Passive Funds, which track an index of stocks now holds 5.4 trillion in assets compared with 1.2 trillion before the crash.
Financial advisers say the push is driven by clients who lost trust in fund managers after nearly all of them failed to see the crash coming.>> Yeah, it was a shock. You think you have the brightest people on the boards. A lot of these people made bad bets in the mortgage business.
>> Increasingly, those investors looking for risk are turning to cryptocurrencies, which they hope will deliver the outside returns they no longer see coming from the stock market.