If the stock market is bipolar, is there a fix? Is there a lithium solution to level out the stock market fluctuations? Or are investors on the edge, reacting to every bit of negative financial news with orders to sell, sell, sell. When there isn’t confidence in the stock market, where is the money going? Banks report savings account balances are higher in many decades. Good for the banks, bad for the markets. Where are the stock market investors who would rather be earning a solid 4% dividend on perennial performers who have never let their investors down, such as Heinz or Kimberly Clark or Smuckers? …versus… Parking their money in a savings account not even earning them 1% interest? Safety is a factor. Investors are playing it conservative, literally stuffing money under the mattress instead of putting it at risk. Other investors have taken to the precious metals markets, trying to turn profits on gold, silver, platinum, et al.
Will investor confidence return? It took the Japanese economy nearly a decade before it climbed out of its recession in the 90’s, and now it’s heading back into a recession due to economic pressures and the aftereffects of the earthquake and tsunami which have caused many investors to drop their Japanese stocks. Japanese banks also reported during the long recessionary period that savings account balances were higher than before the recession. Recessionary behaviors, regardless of culture, seem to be similar.