Small Investors

Commercial real estate, traditionally a reliable haven for small investors, has shown its dark side in the last year. Real estate values have come down from their peak around 2006 and operating costs have frequently increased as tenants of such properties as apartment buildings, stores and warehouses have moved out or fallen behind on their rent.

Over the last six years, roaring bears and raging bulls both have had their turns to be right about financial markets. But investing success in the next market phase could be far more about pinpointing individual opportunities than riding a wave. This is when it should pay for a money manager to have maximum flexibility: the option to go almost anywhere with investors' dollars in search of decent returns. That could include stocks, bonds, real estate or commodities, for example.

California solar panel installer SolarCity is turning to small investors to raise cash to expand its network of rooftop solar systems. The company, which installs solar panels on homes and businesses and government buildings, will allow individual investors and institutions to invest in solar panels that can generate income for years to come. Solar City Chief Executive Lyndon Rive told the Associated Press that the company would sell securities directly to individuals. These securities could be held for varying lengths of time, or even traded.

At a time when public trust in Wall Street already is at a low, new allegations about high-speed stock trading threaten to further erode confidence in the financial markets. The furor centers on accusations that professional traders armed with ultra-fast computers have rigged the stock market. High-speed firms engage in what critics say amounts to insider trading, using super-charged systems to decipher trading patterns. Criticism of high-frequency trading has long swirled in financial circles, and multiple regulators are conducting investigations.

Small investors should beware of rising interest rates, a regulatory group warned Thursday. The Financial Industry Regulatory Authority issued an “investor alert” warning individuals that their fixed-income holdings could lose value if interest rates rise. With interest rates hovering near record lows, a wide range of experts worry that small investors are not prepared - financially or emotionally - for the eventual likelihood that rates will rise. In general, an increase in the rates being paid on newly issued bonds, such as popular U.S. Treasury securities, erodes the value of older bonds.

The stock market has returned to normal. Share prices are back at record highs -- and small investors are selling. After pouring into U.S. stock mutual funds early in the year, individuals have been net sellers in four of the last five months, according to data from the Investment Company Institute, a fund industry trade group. To put it indelicately, the proverbial dumb money has been rushing out of the market just as share prices have been racing up. The Dow Jones industrial average and Standard & Poor's 500 index hit record highs Thursday on hope that U.S. economic growth is picking up. The Dow is giving back a bit Friday.

While a horde of lobbyists representing big banks and financiers fights every modest effort of the Obama administration to set limits on their clients' buccaneering ways, JPMorgan Chase and Morgan Stanley have shown, once again, how these pirates of finance cannot be trusted with the power they have over the economic security of the American middle class. A couple of weeks ago, JPMorgan Chase & Co. revealed losses on risky investments that, thus far, total more than $2 billion.

Steve Dorsey took the stock market's teeth-clenching sell-off in stride Thursday — but only because he sold all the stocks in his retirement account six weeks ago. The 63-year-old attorney from San Marino feared the debt crisis would cause the market to tumble, and he was willing to forgo potential gains to sidestep what he feared could be a huge loss. "I thought I might miss 4% or 5% upside, but I might miss a big downturn," Dorsey said. "I went through 2008 and the dot-com one too. " The American public's once-fervent love affair with stocks has taken a beating in recent years, and the latest collapse is likely to only intensify investors' suspicion and fear.

Gold has lost some of its gleam among small investors who once saw it as a financial salvation. The precious metal suffered its sharpest price drop in three decades, as the frenzy that drove gold to fantastic heights in recent years reversed course with a vengeance. Gold shriveled more than 9% on Monday, its worst drubbing since 1983. It's down more than 13% in the last two trading days. The loss in gold preceded Monday's bomb attacks in Boston. The losses have been agonizing for individual investors who poured in during recent years.

For more than a quarter of a century, investors have been able to bring class-action lawsuits against companies that have fraudulently inflated their stock prices without having to prove that each buyer of the stock had been individually duped. Now, industrial giant Halliburton Co. is trying to persuade the Supreme Court to make such lawsuits significantly harder, if not impossible, to bring. That would be a fantastic result for publicly traded companies, but a terrible one for the average investor.

For more than a quarter of a century, investors have been able to bring class-action lawsuits against companies that have fraudulently inflated their stock prices without having to prove that each buyer of the stock had been individually duped. Now, industrial giant Halliburton Co. is trying to persuade the Supreme Court to make such lawsuits significantly harder, if not impossible, to bring. That would be a fantastic result for publicly traded companies, but a terrible one for the average investor.

California solar panel installer SolarCity is turning to small investors to raise cash to expand its network of rooftop solar systems. The company, which installs solar panels on homes and businesses and government buildings, will allow individual investors and institutions to invest in solar panels that can generate income for years to come. Solar City Chief Executive Lyndon Rive told the Associated Press that the company would sell securities directly to individuals. These securities could be held for varying lengths of time, or even traded.

Wall Street had plenty of reasons to think 2013 would go miserably for the stock market - what with a lackluster global economy, the U.S. government shutdown, Syria's civil war, the Obamacare fiasco and Miley Cyrus. Instead, we're on track for a 29% gain in the Standard & Poor's 500 index, which would be its best annual showing since 1997. So the highlight of the year for many Americans will be the repair job on their retirement savings accounts. But taking a broader view, here are six 2013 market memories that should endure: • Ma and Pa come back to stocks.

The stock market rally rolled on Monday, with the Nasdaq composite index crossing 4,000 for the first time since 2000. Though it remains far below its all-time high, the technology-laden Nasdaq is up more than 32% this year, making it one of the best-performing market indexes of 2013. Nasdaq rallied strongly Monday morning, topping 4,007 before sagging to just below 4,000. Nasdaq has been propelled by many of the same forces that drove the Dow Jones industrial average above 16,000 last week: solid corporate profits, low interest rates and the Federal Reserve's economic-stimulus campaign.

NEW YORK - Month after month, Stan Wright watched impatiently as the stock market climbed higher while his money sat on the sidelines earning next to nothing. Like many Americans, Wright, 51, yanked his savings out stocks during the 2008 financial crisis and pinned his hopes on historically safer investments in bonds. Now he wants back in on the stock market, which is in the midst of its strongest rally in a decade. "There is really, truly almost no place else to put money right now," said Wright, a Bay Area business owner who has sunk $10,000 into stocks in the last six weeks.

The Dow Jones industrial average closed above 16,000 for the first time, a testament to investors' hope that the plodding economy can gain momentum in the coming year. The index, a gauge of 30 of the largest American companies, jumped more than 109 points to close at 16,009.99. Thursday's advance was propelled by a better-than-expected drop in jobless claims and a Senate panel's vote supporting Janet Yellen's bid to lead the Federal Reserve. The stock market is caught up in its most furious rally in a decade.

If you're a small investor seeking a piece of the Facebook initial public offering, here's the bad news: You're too late and you're too poor. That's the good news too, by the way. Investment frenzies - and stock market veterans have been filling the news media lately with the claim that they've never seen anything like this one - almost never end prettily for the participants. What may have stoked the flames this time were hints that Facebook or its Wall Street underwriters might crack open a window for small investors, who almost never have a shot at high-profile IPOs.

As Facebook Inc. files for what is likely to be a historic initial public offering of stock, a big question looms for its millions of loyal users. Will they be able to get in on what could be the hottest deal in years - or will they be left with their noses pressed against the glass, as individual investors typically are in coveted IPOs? Ordinary investors normally are relegated to the sidelines in red-hot IPOs, with Wall Street brokerage firms that handle the deals parceling out shares to hedge funds, mutual funds and some ultra-wealthy individuals that generate big trading commissions.

There is a moment in every bull market when investors worry more about missing gains than suffering losses. The current rally appears to have reached that point. The market coasted to its sixth straight weekly advance Friday, propelled by optimism over the Federal Reserve's easy-money policies and a torrent of cash from small investors. The Dow Jones industrial average jumped 85.48 points, or 0.5%, to 15,961.70, its 38th new high of the year. The blue-chip index rose 1.3% for the week.

Crowdfunding has raised money to build libraries, make movies and send children on school trips. Soon it may let small investors buy stakes in fledgling companies. Federal regulators proposed rules Wednesday that would allow individuals to invest in start-ups over the Internet. The goal is to make it easier for entrepreneurs to raise money and create jobs, while giving small investors an early shot at latching onto the next Apple Inc. or Google Inc. The Securities and Exchange Commission voted unanimously to propose the regulations, which are required as part of the Jumpstart Our Business Startups Act, which was passed by Congress last year.