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NEW YORK (Reuters) – Stock-picking once again matters on Wall Street.
After a year in which stocks moved in near-lockstep regardless of individual merit, the herd mentality is crumbling away.
The move away from a frenzied rush in and then back out of the market is a welcome sign for stressed-out fund managers and lay investors alike.
“If I think something looks cheap I’m more prepared to own it because I think that will matter. Before, I would throw up my hands and say, ‘So what? If it’s perceived as a higher risk asset then it’s going to crater with any nasty news out of Europe,’” said Art Steinmetz, chief investment officer at OppenheimerFunds in New York.
The change reaffirms the diversification strategies that underpin trillions of dollars worth of savings meant for college tuition and retirement. When just about everything is moving in the same direction, investors have fewer ways to cushion market swoons.
In 2011, daily activity in
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