Mondays in August can be like  watching  your bother stain the deck.  You want to do something to contribute and  worthwhile, but it’s a slow job and you really dont see any use until a few weeks later, and in this case the few weeks out are post Labor Day.  I’m not sure if this year is slower than last year but it sure feels like investors are losing interest.

One of the phenomena of the last several decades has been the rise of the individual investor. As Americans have become more responsible for their own retirement, they have poured money into stocks with such faith that half of the country’s households now own shares directly or through mutual funds, which are by far the most popular way Americans invest in stocks. So the turnabout is striking.

So is the timing. After past recessions, ordinary investors have typically regained their enthusiasm for stocks, hoping to profit as the economy recovered. This time, even as corporate earnings have improved, Americans have become more guarded with their investments.

“At this stage in the economic cycle, $10 to $20 billion would normally be flowing into domestic equity funds” rather than the billions that are flowing out, said Brian K. Reid, chief economist of the investment institute. He added, “This is very unusual.”

The notion that stocks tend to be safe and profitable investments over time seems to have been dented in much the same way that a decline in home values and in job stability the last few years has altered Americans’ sense of financial security.

It may take many years before it is clear whether this becomes a long-term shift in psychology. After technology and dot-com shares crashed in the early 2000s, for example, investors were quick to re-enter the stock market. Yet bigger economic calamities like the Great Depression affected people’s attitudes toward money for decades. For now, though, mixed economic data is presenting a picture of an economy that is recovering feebly from recession.

“For a lot of ordinary people, the economic recovery does not feel real,” said Loren Fox, a senior analyst at Strategic Insight, a New York research and data firm. “People are not going to rush toward the stock market on a sustained basis until they feel more confident of employment growth and the sustainability of the economic recovery.” One investor who has restructured his portfolio is Gary Olsen, 51, from Dallas. Over the past four years, he has adjusted the proportion of his investments from 65 percent equities and 35 percent bonds so that the $1.1 million he has invested is now evenly balanced.

He had worked as a portfolio liquidity manager for the local Federal Home Loan Bank and retired four years ago. “Like everyone, I lost” during the recent market declines, he said. “I needed to have a more conservative allocation.”

To be sure, a lot of money is still flowing into the stock market from small investors, pension funds and other big institutional investors. But ordinary investors are reallocating their 401(k) retirement plans, according to Hewitt Associates, a consulting firm that tracks pension plans.

Until two years ago, 70 percent of the money in 401(k) accounts it tracks was invested in stock funds; that proportion fell to 49 percent by the start of 2009 as people rebalanced their portfolios toward bond investments following the financial crisis in the fall of 2008. It is now back at 57 percent, but almost all of that can be attributed to the rising price of stocks in recent years. People are still staying with bonds.

Another force at work is the aging of the baby-boomer generation. As they approach retirement, Americans are shifting some of their investments away from stocks to provide regular guaranteed income for the years when they are no longer working.

And the flight from stocks may also be driven by households that are no longer able to tap into home equity for cash and may simply need the money to pay for ordinary expenses. On Friday, Fidelity Investments reported that a record number of people took so-called hardship withdrawals from their retirement accounts in the second quarter. These are early withdrawals intended to pay for needs like medical expenses.

For more information visit http://www.worldmarketmedia.com/779/section.aspx/2278/post/monday-market-silence-few-will-pay-attention-until-after-labor-day

- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source

Summer Friday and GDP is slighly worse than expected and the economy grew slower, thats not really a shocker, as we digst earnings.  Lets face it Q3 can be a bore and all we really wait for is the Football Season and hope to avoid a market sell off in October.  On this Friday the best thing to do is head to weekend thinking and avoid closing on the lows for the day.

(AP) — Stocks fell and interest rates rose in the Treasury market Friday after the government said the economy grew at a slower pace than expected during the second quarter. The Commerce Department said the gross domestic product, the broadest measure of the economy, grew at an annual pace of 2.4 percent from April to June. That’s less than the 2.5 percent economists polled by Thomson Reuters had forecast.

The Dow Jones industrial average tumbled 106 points in early morning trading.

The report confirmed investors’ belief that the recovery is weakening as unemployment remains high and government stimulus programs end. Consumers cut back on their spending because of job worries and companies spent less to rebuild inventories.

The figure was especially discouraging after the government revised first-quarter growth to a pace of 3.7 percent from 2.7 percent.

The Dow Jones industrial average entered the last day of July up 7.1 percent for the month. The market‘s big gains have come on strong corporate earnings and profit forecasts that conflict with economic reports that point to a slowdown.

In the past few days, however, investors have been more focused on economic reports. Disappointing numbers on housing and unemployment and cautious words from the Federal Reserve have sent stocks lower.

In early morning trading, the Dow Jones industrial average fell 105.96, or 1 percent, to 10,361.20. The Standard & Poor’s 500 index dropped 11.88, or 1.1 percent, to 1,089.65, while the Nasdaq composite index fell 28.50, or 1.3 percent, to 2,223.19.

The disappointing GDP report sent investors into the safety of the Treasury market, which drove interest rates lower. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.93 percent from 2.99 percent late Thursday. Its yield is used to set rates on mortgages and other consumer loans.

European markets fell after reports that Spain’s credit rating is likely to be cut by Moody’s Investors Service. The potential downgrade comes as the country’s unemployment rate jumped to a 13-year high of 20.09 percent and the government continues to grapple with rising debt problems.

Losses also accelerated in Europe after the weak GDP report.

Spain’s IBEX 35 fell 2 percent. Britain’s FTSE 100 fell 0.8 percent, Germany’s DAX index dropped 0.8 percent, and France’s CAC-40 fell 0.8 percent. Japan’s Nikkei stock average fell 1.6 percent.

Click here for more information.

- About the Author: WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies. Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

A weak July consumer confidence fell to a 5-month low offset the latest round of strong corporate earnings. On Wednesday June durable goods orders as well as the weekly mortgage applications and petroleum reports. The Beige Book is expected today which report economic conditions used for the FOMC meetings in 2 weeks. Expect the market to move after the 2pm Eastern Standard Time announcement.

On the S&P 500 on the 60-day chart shows we have been rallying since the beginning of July especially after options expiration last Friday. Expect the market to hit the January 2010 resistance level as we approach the slowest month of the year – August. The volume will not be enough in August to break through the January resistance levels.

TO BE CONTINUED WITH CHARTS AND VIDEOS HERE!

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers Live News Feed Article Source