U.S. households own numerous financial assets. They invested some $271 billion net in 2000 in financial assets, although this amount was down sharply from the $476 billion invested in 1999. On balance, households were net sellers of stocks and bonds held directly. However, they were net buyers of mutual funds.

Mutual funds are the quintessential asset for U.S. investors. In 1990, households owned 76 percent of all mutual fund assets. By 2000 they accounted for 80 percent of all mutual fund assets, and total mutual fund assets at that time totaled $7 trillion.

^[1] At the end of 2000, financial, business, and other organizations owned about 11 percent of mutual fund assets, and fiduciaries owned about 10 percent. Thus, households owned about 80 percent of all mutual fund assets.

Perhaps they are reassured by statements such as that made to a mutual fund industry gathering by Arthur Levitt when he was chairman of SEC and a well-known advocate for the rights and protection of individual investors: “You have earned the confidence of the American public—and you’ve done so without the safety net of federal insurance to protect investors from mistakes