15  See also Blume, M. (2000), The structure of the U.S. equity markets, Rodney L. White Center for Financial Research, paper 17-00, The Warton School, University of Pennsylvania. BIS Review 5/2002  7  conclusion at present could be that certain tendencies that were evident in the United States may also have been present in Sweden. How can households’ risks be reduced? Besides calling for more knowledge about what actually happened while the IT bubble was growing, the course of events raises what is perhaps the more important question of what can be done to provide more support in the future for long-term saving by households. It is essential for society in general that stock markets function properly. At the same time, households need an adequate return on their savings and should be in a position to identify and manage different types of risk. Basically, this is a matter of education. Over the years, the Swedish Share Promotion Association and the Swedish Shareholders Association have done much to improve people’s knowledge of these matters. Information that is prompt, up-to-date, correct and relevant is likewise crucial. The new technology is inundating us with information but more does not necessarily mean better. It follows that households must be helped to interpret the information and pick out what matters most. An import role in this respect is played by independent analysts and consultants, not to mention media. These agents can see through and criticise corporate managements that are unduly optimistic or provide information selectively.
Saving regularly in particular shares or a mutual fund reduces the problem of timing but experience shows that the inputs should be spread over a long period. Another approach involves using various methods to assess when the stock market is high or low; as I need hardly point out to such an experienced assembly, this is not exactly easy. Diagram 1 Real earnings on shares, bonds and bank savings 8  7,0  7,2  7 6 5 3,5  4  3,2  2,9 2,4  3 2 1 0 Shares  Bonds  USA 1802-1998 13  Bank savings  Sweden 1918-1998  All three diagrams come from Bäckström, U. (2000), Tankar om aktiesparande (‘Thoughts about saving in shares’) Ekerlids Förlag, Stockholm.