Courtesy of Pam Martens.
I was browsing the Wall Street Journal’s web site last night and found this interesting take on the Dow Jones Industrial Average’s flirtation with 14,000 – a number it last saw in October of 2007. “Small investors are jumping back into the stock market after abandoning it during the financial crisis, and their return is a big reason why the Dow is pushing toward an all-time high.”
The article was prominently placed at the very top of the left hand column under the headline “Individual Investors Aid Stock Surge.”
On January 25 of this year, the New York Times proclaimed a “flood” of new money from individual investors:
“Millions of people all but abandoned the market after the 2008 financial crisis, but now individual investors are pouring more money than they have in years into stock mutual funds. The flood, prompted by fading economic threats and better news on housing and jobs, has helped propel the broad market to within striking distance of its highest nominal level ever.”
Clearly, it’s time we discuss the word “distribution” as it’s understood by the denizens of Wall Street.
The retail brokerage firm that is joined at the hip to major investment banks on Wall Street is considered the distribution channel. The investment bank underwrites various equity (stock) and debt (bond) offerings, and exotic hybrids of both, and uses its thundering herd of stockbrokers (financial advisors) to distribute the product to the investing public (retail) investor.
…
