Since the 2007 stock market top, many investors have left the stock market. This is very evident by simply looking at the extremely light trading volumes over the past several years. There are more and more equities in the stock market, but trading volume continues to decline. There have also been many signs of mutual fund outflows as the stock market has risen since March 2009. This tells us that many people that would have normally invested or traded in the stock market are no longer participating.
There are many reasons why so many investors have left the stock market. The first reason is that many individuals lost their jobs in 2008 and now remain much more cautious. The second reason is due to the large stock market decline that occurred 2008 and early 2009, investors are simply afraid of losing money again. Next, there is the flash crash that took place on May 6, 2010. That flash crash stopped many investors right out of their positions as the highly followed Dow Jones Industrial Average (DJIA) declined over 1000.0 points before settling lower by 400.0 points on the trading session. There have also been many disturbing allegations against leading financial firms such as J.P. Morgan Chase & Co (NYSE:JPM), Goldman Sachs Group Inc (NYSE:GS), Bank of America Corp (NYSE:BAC), and others. The mom and pop investors are still very sour due to the MF Global bankruptcy. After all, former Goldman Sachs CEO turned N.J. Governor Jon Corzine was the CEO of MF Global at the time of the bankruptcy. There are also the endless protests such as the 'Occupy Wall Street' movement that casts a dark shadow on the investing public. These are just some of the problems that have left a bad taste in the individual investor. Who can blame the mom and pop investors for being sour on the stock market.
Many traders and investors have benefited from the recent stock market action. Recently, the S&P 500 Index, and the Dow Jones Industrial Average have made new all time highs surpassing the 2007 top. Since the 2009 low, every stock market correction has been a buying opportunity. Even if you do not believe in the stock market because of all of the money printing by the central banks it has proved to be a solid money making opportunity. Anytime the stock markets decline the central banks pump more money into the system and stocks rally. The Federal Reserve (U.S. central bank) has pledged to keep interest rates extremely low until unemployable reaches 6.0 percent, that could be a very long time. Traders and investors that have learned to use charts can generally exit the stock market when it becomes overbought and re-enter when it becomes oversold. There are trading opportunities each and everyday in the stock market. Yet, the individuals in the public are not able to take advantage of the opportunities that occur nearly every single day. Get educated, learn the charts, and forget the news from the talking heads in the financial media. There are so many equities such as Exxon Mobil Corp (NYSE:XOM), Chevron Corp (NYSE:CVX), SPDR S&P 500 Trust (NYSEARCA:SPY), Coca Cola Co (NYSE:KO), and others that have provided many opportunities over the years.