Sometimes you hear it said that the stock markets run on perfect information, but that just isn't so. Many investors remain very much unaware of what is actually happening in the markets. For instance, the mutual fund firm Franklin Templeton recently surveyed 1000 American investors about the recent history of stocks, and the results were shocking.
Fully two thirds of the investors surveyed thought that the S&P 500 had lost ground in 2009, when in fact it actually gained 26.5 percent that year. Perhaps they were confused by the fact that 2009 was when the S&P hit its lowest point in the recent downturn, but roughly half, or 48 percent, also thought the index had declined in 2010. In reality, the S&P rose 15.1 percent that year.
That may help explain why there is nearly $6 trillion now parked in money market accounts or other cash equivalents, missing out on this bull market we've ben experiencing the past three years. When it comes to something as important as your financial future, it pays to stay well-educated.
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