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Investors Seen As Skittish on Risk Taking

By Meg Richards, AP Business Writer

Investors Hard Pressed to Find Value in Market Rattled by Fear, Seem to Prefer Overseas Equities

NEW YORK (AP) -- Investors have plenty of reason to be out of the stock market right now: mixed earnings news, anxiety over inflation, worries about interest rates and climbing oil prices.

Further reflecting caution in the market, the strongest areas are those that historically have been most defensive: consumer staples, energy and utilities. The weakest sector is technology.

"We are back to the quality trade. Investors are skittish about risk taking, and this is after two years of being rewarded for risk taking, so it's a reversal," Ablin said. "Everyone is liquidating positions in the growthier areas, and gravitating toward the more predictable toilet paper and toothpaste companies."

Some earnings season jitters are normal, but most analysts agree that something else is at work in the market. After the fourth quarter's robust performance, some lull was to be expected. But the idea that the market is in a transition, and that investors are not yet sure how to cope with it, persists.

"There isn't a really good alternative place to put your money. ... Long bonds look terribly risky. And overseas, Europe isn't looking gangbusters now either," said Janna Sampson, director of Portfolio Management at Oakbrook Investments. "Outside of taking great risks, where are you going to go? I think you wind up back in the U.S. stock market."

Toilet paper and toothpaste? Give me a break. One of the things that just blows me away is this idea that technology is 'riskier' than any other sector of the market. Risk is a fact of life. It's inescapable. Selling your technology stocks to put it into Proctor & Gamble is risky -- what if all of a sudden people become enamored with technology again and start to shun boring detergent companies? Then you've lost out on whatever was to be gained by just staying put.

Pretty much every stock that I watch has gotten absolutely clobbered over the course of this month. It's kind of interesting to watch this mass psychology in action. Really, it reminds me of watching the little hapless lemming creatures follow each other off the cliff in a huge herd, just flopping over the side, all in a row, over and over.

Personally, I don't think fear belongs in investing. I think worrying about 'risk' is counterproductive.

Over the course of my lifetime, I've seen Pong turn into the Xbox. When I was 5, we had the hottest technology ever, an IBM personal computer with a 4.77 MHz Intel CPU, 64 KB RAM and a monochrome green monitor that could only display text -- acquired for the bargain price of $3000. Sitting in my office now is a computer that runs close to 700 times faster, has over 16,000 times as much memory, and cost less than half as much.

So, I dunno. Thinking about what's happened with technology over the years, I find it really hard to even acknowledge a skeptic's view as having any merit. There's no saturation, there's no endpoint, there's no stopping these kinds of geometric advances in capabilities. They just keep going and going and enable massive waterfalls of economic growth to keep happening, on and on.

I think you just kind of have to accept that what you've experienced in life means something and figure out what it's going to mean going forward. Things are always changing and progressing and moving forward. Anxiety, worries -- these are no basis for decision making on any topic, much less figuring out what to do with a lifetime of savings.

All you have to do is align yourself with the process of augmenting human capabilities. Invest in things that make people smarter, more productive, faster and more capable. New technologies that allow people to do things that they couldn't do before. See things that they couldn't see before. Know things that they couldn't know before. Earn more money than they could earn before, and do a better job than they could do before.

Toothpaste and toilet paper are not going to do that. But products like Nomad are.


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