Investors are Net Sellers of $377 Billion in Stocks and Bonds Each Year

When people ask “where’s the volume” in the public markets, I try to explain that there are several factors responsible for the dearth.  One factor that I never hear mentioned is that the public’s predilection is to own index ETFs or mutual funds instead of buying individual stocks and bonds.  They’ve learned that it rarely pays for them to try to outsmart the indices and do all the work involved research and management-wise to have individual holdings.  This tendency has meant a lot less trading in individual issues and so less overall volume.

Some interesting stats from the Investment Company Institute (ICI) on the investment management industry and where people have their money held circa now:

Americans’ Continued Reliance on Investment Companies
Households are the largest group of investors in funds, and registered investment companies managed 23 percent of households’ financial assets at year-end 2011, essentially unchanged from 2010 (Figure 1.2). As households have increased their reliance on funds over time, their demand for directly held stocks has been decreasing for the past decade (Figure 1.3). Household demand for directly held bonds, which tended to be relatively strong prior to the financial crisis but has been weak ever since, plummeted in 2011. In contrast, over the past decade, households’ net investment in registered investment companies has been consistently positive and substantially stronger than their net purchases of directly held bonds and stocks. Households invested an average of $409 billion each year, on net, in registered investment companies versus average annual sales, on net, of $377 billion in directly held stocks and bonds over the past 11 years.



This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Bitcoin Trading Software commented on Sep 23

    … [Trackback]

    […] There you will find 29166 additional Information to that Topic: […]

  2. trap 2021 commented on Oct 25

    … [Trackback]

    […] Find More on that Topic: […]

  3. tangerine login website commented on Nov 29

    … [Trackback]

    […] Read More Information here to that Topic: […]

  4. Skrota defekt bil Trollhättan commented on Dec 26

    … [Trackback]

    […] Find More here on that Topic: […]

  5. backyard bags distance commented on Dec 30

    … [Trackback]

    […] Read More on that Topic: […]

  6. breitling avenger seawolf replica commented on Dec 31

    … [Trackback]

    […] Info to that Topic: […]

  7. rolex replika commented on Jan 19

    … [Trackback]

    […] There you can find 30063 more Information to that Topic: […]

  8. bandar 77 commented on Jan 23

    … [Trackback]

    […] There you can find 17110 additional Info on that Topic: […]

  9. Grote parasols commented on Jan 30

    … [Trackback]

    […] Information to that Topic: […]