[OPE] "Structurally risk averse"

Investors still struggling to put fear behind them
Reuters Wed Oct 21, 2009
By Jeremy Gaunt - Analysis

LONDON (Reuters) - Many of the world's wealthiest investors remain
traumatized by the losses they sustained during the financial crisis and are
clutching on to safe, low-yielding assets rather than taking any risks.
Wealth managers say that even after a 75 percent rise in world stocks since
March, a lot of clients' money has yet to move. Investors have, in the words
of one strategist, become "structurally risk averse." (...) Fund tracker
EPFR Global reckons that some 94 percent of the net flows to U.S. money
market funds it tracked in 2008 has already exited. But going further back,
it says U.S. money funds that report weekly took in a net $191 billion in
2007 as a whole. That suggests that the cash unwinding of the past two years
is at most only two thirds through. "There is a lot of juice," said Michael
Dicks, head of research and investment strategy at Barclays Wealth. "Even if
they went half way from where they are now to where they were pre-crisis,
that would produce a significant amount of momentum."
Today's problem for investment managers -- who, of course, get their fees
from clients making money and moving around assets -- is that the stock
market crash was so harsh that many investors are almost terminally gun-shy.
World equities did, after all, fall some 60 percent from peak to trough.
(...) http://www.reuters.com/article/ousiv/idUSTRE59K2QC20091021

Well, I've been down so Goddamn long
That it looks like up to me
Well, I've been down so very damn long
That it looks like up to me
Yeah, why don't one of you people
C'mon and set me free
I said, warden, warden, warden
Won't you break your lock and key
I said, warden, warden, warden
Won't ya break your lock and key
Yeah, come along here, mister
C'mon and let the poor boy be

- The Doors, been down so long

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Received on Sun Oct 25 10:16:31 2009