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MONEY SMALL INVESTOR INDEX: INVESTORS STILL PREFER BONDS AND CASH

/ADVANCE/ NEW YORK, March 10 /PRNewswire/ -- Even though investors have poured $50 billion into stock mutual funds this year, the typical individual's portfolio still consists mostly of bonds and cash vehicles, according to data gathered for Money magazine's Small Investor Index.

A remarkable $21 billion in fresh money cascaded into stock mutual funds last month, following $29 billion added in January, according to the Investment Company Institute (ICI), a mutual fund trade group in Washington, D.C. In 1995, investors poured $128 billion into stock funds. Thanks in part to those inflows plus investment gains, stocks and stock mutual funds now account for 46 percent of the typical investor's portfolio, up from 44 percent a year ago. However, 52 percent of the portfolio remains in more conservative investments such as bonds, money- market funds and bank certificates of deposit.

Stocks have gained an average of 5 percent through March 7, topping bonds, which have essentially stayed flat, and money funds and CDs, which have earned less than 1 percent. But the diversification among different types of assets will protect individuals against steep losses if stocks tumble.

Despite stock market volatility, analysts expect investors to continue increasing their stockholdings as they seek high returns for their retirement savings. "People, especially baby boomers, are willing to take a little more risk with equity funds in their retirement plans to get bigger gains in the long run," says Joni Hamilton, an ICI analyst.

Last week, the Money Index, which tracks the value of the typical investor's holdings, rose $406 to $58,969. Stocks gained $353. Bonds returned $62. CDs and money funds added $12. Gold lost $7.
 This Last Year % Change from a
 Week Week Ago Week Ago Year ago
 103.35 102.61 86.44 +0.72 +19.57
 Latest changes for each asset
 % change from a
 Category Index Week Ago Year Ago


Stocks
 NYSE 106.90 +2.13% +37.27%
 ASE/OTC 105.12 -1.08 +37.84
 Equity funds 106.38 +1.18 +29.58


Bonds
 Taxable Bonds 99.34 +0.24 +11.25
 Municipals 102.89 +1.71 +11.44
 Bond funds 100.26 +0.33 +12.22


Cash
 CDs 100.91 +0.09 +5.26
 MONEY FUNDS 100.55 +0.05 +2.97


Other
 Real estate 103.91 +0.73 +14.49
 GOLD 111.98 -2.21 +27.07


Dec. 28, 1995 = 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 25.54% 25.67% Bond funds 6.07% 5.92%
 ASE/OTC 8.07 8.11 CDs 12.41 12.60
 Equity funds 12.84 10.26 Money funds 18.51 19.16
 Taxable bonds 11.66 13.17 Real estate 0.95 0.91
 Municipals 3.39 3.68 Gold 0.57 0.52


Sources: Bank Rate Monitor, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Money Fund Report, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 3/11/96


/NOTE TO EDITORS: This material is also available in printable form from AP GraphicsNet and Access services for graphics and tables (under the file name MoneyIndex) and from PR Newswire for full text./

/CONTACT: Jordan Goodman of MONEY, 212-522-3618, or Patti Straus of MONEY Public Relations, 212-522-2695/

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PS -- NYF055 -- 1758 03/08/96 17:45 EST
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