A February 13, 2013 Wall Street Journal article carried a headline that probably surprised few of its readers: “Fun Fades at Investing Clubs.” The article cited a sobering statistic that was attributed to the 62-year-old non-profit group, BetterInvesting: national participation in investment clubs had declined from 400,000 members in 1998 to only 39,000 members by 2012.
Other sources confirm the decaying rate of individual participation in private investment clubs. The Google Trends chart for the search term, “investment club,” shows Internet search activity at a small fraction – about 20% – of the peak interest level that had been observed in the mid-2000s. A similar downtrend in search activity can be observed for a variety of investment-related terms. These trends echo parallel developments in other investment-related media. Cable television viewership of financial programming has been on the wane. US stock market trading volumes continue to ebb. These patterns are hardly surprising, but they do underscore a few disconcerting realities about the world of stock market investing.
1. Mechanization. The aforementioned Wall Street Journal article noted that, according to TABB Group, more than half of US equity trading volume can now be attributed to activity by hedge funds, high-frequency traders and computerized algorithms. One senses that investors increasingly feel stock market investing is something that’s no longer “by them,” or “for them.” Many would agree that the stock market has taken on a cold, mechanized sense of inaccessibility. Imagine the 1968 film, 2001: A Space Odyssey, reset in 2013, with the cool presence of rogue computer villain, HAL, replaced by an algorithmic trading system, eerie red camera eye and all.
2. Trepidation. Mature investors have recently lived through several deeply unsettling cycles of boom and bust. The TMT (technology, media and telecom) bubble burst of the early-2000s, and even more vivid memories of the housing-related financial crisis that began in 2008, have impelled some investors, particularly those approaching retirement age, to abandon the stock market altogether. If you’re like me, you’ve probably encountered more than one late-career professional who has foresworn equities in favor of real estate, or some other alternative investment category. As aptly put by the Wall Street Journal, “stocks aren’t fun anymore; they are scary.”
3. Tedium. The potential exhilaration and entertainment value of “playing” the stock market, a cultural fixture of the late-1990s, may have simply run its course. One sometimes perceives, while watching CNBC, an almost forced effort on the part of its anchors and reporters to simulate a sense of excitement and drama that’s no longer as palpable as it had been a decade ago. Distrust and fear, combined with a grizzled world-weariness about the chaotic ways of the stock market, may have simply given way to a dejected sense of fatigue and ennui. If stock investing were still part of the cultural Zeitgeist, certainly we would have seen at least one reality television show on the air with day-trading as its premise.