Keep Faith in the Market (Editorial)

Despite hitting its lowest level in five years recently, we were surprised by a recent Associated Press poll that showed Americans losing faith in the stock market.

Almost two-thirds of Americans, the poll said, including more than half of the people already invested in the market, say it’s a bad idea to make a substantial investment now.

People were asked if they had $1,000 to spend whether they thought it would be a good idea to invest it in the stock market. Only 29 percent said it was a good idea; 64 percent said it was a bad one. Just over half of those who said they had investments in the stock market or mutual funds thought it was a bad idea.

No doubt, the prolonged bear market, a struggling economy and a rash of corporate scandals have taken their toll on many. But somehow, it seems almost un-American not to keep faith in the greatest economic system the world has ever seen.

The poll was taken when the market was at its lowest — when many solid stocks were at bargain-basement prices. Less than a week later, the market had gained more than a 1,000 points. Wonder if any of those naysayers wish they had, in fact, invested another thousand bucks.

Are happy days here again? Maybe. Maybe not.

While the last months of the year historically have been among the best for stock prices, we still believe the best bet is long-term investing. History has shown time and again that those who do so are rewarded in the end.

We agree with Warren Stephens, president and CEO of the Little Rock securities firm Stephens Inc. He recently told members of the Downtown Little Rock Rotary Club that the U.S. economy remains sound.

We particularly liked the advice given to him by his father, Jack Stephens, who said, “Nobody’s ever made money shorting the American economy.”

Stephens said the economy eventually will bounce back and that the integrity of U.S. markets is unparalleled in the world.

It may take a while before Americans regain their confidence and return to investing in the market, although we hope for a quicker turnaround.

While it may be hard for the markets to make a big leap into positive territory by the end of the year, we still have faith in the American economy.