All World Trackers - High Risk? - I Don't Think So

green_man

From my short experience in investing it would seem that stock and shares are just getting more and more popular, with huge amounts of money pumped in through pensions that would not have been the case in years gone past.

The younger generation seem to absolutely love investing! and I can only see this increasing with time.

It may be true that more people than ever are investing in the market, however this isn’t necessarily a great thing.  Many under 30 year olds will not have experienced a significant crash. This only makes the markets potentially  more risky. When a sustained crash does come how will these inexperienced investors react, it’s likely that many will sell up which will exaggerate any crash. 

Thrugelmir

green_man said:

From my short experience in investing it would seem that stock and shares are just getting more and more popular, with huge amounts of money pumped in through pensions that would not have been the case in years gone past.

The younger generation seem to absolutely love investing! and I can only see this increasing with time.

It may be true that more people than ever are investing in the market, however this isn’t necessarily a great thing.  Many under 30 year olds will not have experienced a significant crash. This only makes the markets potentially  more risky. When a sustained crash does come how will these inexperienced investors react, it’s likely that many will sell up which will exaggerate any crash. 

Many will using borrowed money.  Not their own capital resources.  Leveraging is a double edged sword which magnifies both the upside and the downside.  Having assets worth less than the debt owed will cause many to throw in the towel. Institutional investors will simply sit on the sidelines and bide their time.