New Types of Investment.

Stock prices rose during the 1950s. In 1954 the market passed a milestone of sorts, finally eclipsing the 1929 Dow Jones high of 381.17. Part of the growth occurred due to a new type of investment, the mutual fund, which made its appearance during the decade. Mutual funds expanded to 2.5 million shareholders by 1960. Mutual funds were mixtures of many different stocks managed by a brokerage firm or mutual-fund firm. For a small sum an investor could purchase a small "piece" of General Motors, IBM, Coca-Cola, or any of dozens of other companies. The flexibility of the fund reduced risk and encouraged small investors to get back into the market. Direct stock ownership remained in the hands of a small minority, however, as only 8 percent of Americans owned stock in 1955.

Massive Pools of Money.

The rise of huge insurance companies, with their massive pools of money (assets of $56...