Saturday, August 12, 2000
Personal finance
Equity mutuals still strong
The stock market's schizophrenic spring didn't slow investor interest in equity mutual funds.
Despite a sell-off that sent stock prices tumbling in April and individual investors diving for cover, the money flowing into stock-based mutual funds surged in June.
According to the Investment Company Institute, net new cash flow for June 2000 into stock mutual funds was $22.4 billion. That compares with $19.2 billion that trickled in during June 1999.
Indeed, for the first six months of 2000, there was more than twice as much money going into stock mutual funds as there was at the same time in 1999 — $212.5 billion vs. $90.6 billion.
This is not to say that the market's mood swings didn't scare many investors out: Those numbers reflect net new cash flows, accounting for redemptions, too. Redemptions also rose in June 2000 to $84 billion, from $53 billion in 1999.
It's just that so much more money went in.
If Social Security were a person, then Social Security could start receiving Social Security come Monday.
See, Aug. 14 marks Social Security's 65th birthday.
Sixty-five years ago Monday, President Franklin D. Roosevelt signed the Social Security Act into law, forever changing American society.
“The civilization of the past 100 years, with its startling industrial changes, has tended more and more to make life insecure,” he said. “Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last.
“This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”
In the last 65 years:
• Social Security was expanded to provide survivors benefits.
• Social Security was expanded to provide disability benefits.
• Automatic cost-of-living increases were added to Social Security benefits.
• Supplemental Security Income, or SSI, was added to provide a basic federal monthly payment for millions of disabled and aged who do not qualify for Social Security benefits or whose benefits are low.
• The earnings test was repealed to allow people collecting Social Security to work as much as they want.
Most changes — indeed the program itself — have not come without heated debate. Many more are on the table, including private accounts that could fundamentally overhaul the system.
Was this was President Roosevelt had in mind? What about Ida Mae Fuller, when she received the first Social Security check on Jan. 31, 1940, in the amount of $22.54?
That's for us to decide in November in the voting booth.
Amy Higgins writes about personal finance for the Enquirer. You can reach her at 768-8373; ahiggins@enquirer.com; or Your Money, The Cincinnati Enquirer, 312 Elm St., Cincinnati, OH 45202.
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