Doug Henwood wrote:
> Never thought I'd see reasoning like that on PEN-L.
It's true: we have seen some weird reasoning on PEN-L recently. For
instance, just the other day someone wrote re Wall Street that
"everything's groovy"!
> People should keep
> their money in stocks because they have nowhere else to go.
I didn't suggest that people "should" keep their money in stocks. What I
suggested, instead, is that the decision by small-time "investors" to buy
stocks (especially mutual funds plans) has to be looked at in relation to
the other alternatives open to these people.
Consider the options for working people who have savings (especially older
workers): they can put their savings into a savings account and earn what
amount of interest? Even with inflation at relatively "low" levels, they
will feel the bite and might even see a reduction in their real savings.
Or, they could buy bonds ... and have their savings tied up with very high
penalties if they cashed them in early (assuming that is even an option).
Or they could invest in the futures market which is even more risky than
the stock market. Or they could speculate in gold, art, real estate, etc.
(and stand a good chance of being taken to the cleaners). Or they could
"invest" their savings on the ponies, the bookies, and lotto. Or, they
could go on vacation or fishing and just spend their savings (and hope
that they die early and don't end their days eating cat food).
Jerry
