Despite Stock Market Surge, Many Americans Reluctant To Invest

NEW YORK (CBSNewYork) – Wall Street has been on a record run, but fewer and fewer Americans are investing in stocks outside of their 401Ks.

So what is the best move for small investors? CBS2's Jessica Moore got some advice from financial experts.

From Wall Street to the White House, there were celebrations Friday over the soaring stock market.

"Wow, that's all I can say," financial expert Melody Hobson said.

"It has been a strong first week of the year, and the Dow has sailed past the 25,000 mark," financial expert Jill Schlesinger said.

"The stock market is up very, very big today. We've set new records, and I think they'll be continued to set," said President Donald Trump.

Since Trump was elected, the Dow is up 37 percent. Financial experts credit the second-longest bull market in United States history to new corporate tax breaks, a near two-decade low unemployment level at 4.1 percent and economic growth worldwide.

Read More: Will Yearlong Market Surge Continue Into 2018?

Equally as shocking as the sustained surge is the number of individual investors who have pulled out of the market entirely, Moore reported.

According to a 2017 Gallup poll, between 2001 and 2008, 62 percent of American reported owning stocks. Between 2009 and 2017, the number shrunk to 54 percent.

"They are suffering from what I call post traumatic stress disorder from the financial crisis," said Hobson.

"Once you get snake bitten, it's very hard to head back into the woods," Morgan Stanley financial advisor Scott Foster echoed. "That doesn't mean you jump into the market. You do your research, you look to speak to your adviser, you think about what your risk tolerance is. The markets could go on for another – this could be the eighth or ninth inning. We don't know where we are in the innings."

He says while some people are reluctant to re-invest, others are riding the surge too high and can become overly invested.

"Now, it's an even more important time to re-balance it back to your original asset allocation, because that started with the beginning conversation," he said. "What does risk mean to you? Risk mitigation is more important than performance. People get very emotional, they like to keep running with the markets where they've been."

If you're still reluctant to invest, economists say most people with 401Ks are reaping the benefits of this financially historic moment without even realizing it. And for those nearing retirement, stability becomes paramount.

If this trend continues for another 10 months, it will become the longest bull market ever.