See main article "Stocks: A Hard Sell."
“Individual investors have many enemies: high frequency trading algorithms, dark pools, rogue hedge fund managers, fat-finger traders and Fed interventions, just to name a few. But none is as damaging as the individual investor himself.
Investors are worried about money-printing and yet shun the inflation hedge, which are stocks. Investors are worried that government intervention and hedge fund trading distort asset pricing and damage price discovery mechanism, yet they run away from U.S. stocks, one of the very few investment tools whose intrinsic value can be ascertained through fundamentals found in transparent financial reports.
Investors are worried about complexity but pile into complex derivative instruments and alternatives, away from stocks. Investors are worried about liquidity but buy up the new esoteric illiquid instruments. Investors are worried about lack of income, but sell the shares of the cash-rich corporations that pay dividends.
Oftentimes pointing out those contradictions to an investor makes them think and reconsider. It is the job of the financial advisor to make sure investors are emotionally as well as intellectually comfortable with their investments. That may be achieved by education, building out a portfolio with brand names that are familiar, and often just plain hand-holding and positive reinforcement. Just because stocks have been shunned by lots of investors doesn’t mean they are a bad idea.”