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Data & Research April 21, 2014
Average Workers Still Tepid on Stocks
Nearly three in four Americans (73%) say they are not more inclined to invest in the stock market, even after a stellar 2013, according to new research from Bankrate.com.
Reported by John Manganaro
The hesitancy of U.S. workers to increase equity investments persists despite low interest rates on cash and fixed income, Bankrate says, suggesting individual investors are still not warming to equity assets after the shock of the financial crisis. This is true across all age groups and income levels, Bankrate says.
The findings are consistent with survey results from April 2012 and April 2013, Bankrate says, when 76% of Americans said they were not more inclined to invest in stocks.
“Americans may be avoiding the buy-high, sell-low habit seen in previous market cycles, but only because they’re not buying at all,” says Greg McBride, Bankrate’s chief financial analyst. “An overly conservative investment stance compounds the problem that so many Americans have of not saving enough for longer-range goals like retirement.”
Bankrate also announced that its Financial Security Index slipped from 102.2 in March to 100.5 in April. The mixed result shows workers feel improved financial security compared with one year ago—as suggested by any index result above 100—but financial confidence is trending downward.
Three of the five factors considered by the index—job security, net worth and overall financial situation—all show consistent improvement relative to one year ago, but savings, another factor, has reflected deterioration every month since polling began in December 2010.
Bankrate says Americans’ comfort level with their debt swung from improvement to deterioration compared with one year ago. While this feeling is evident among all age groups, the results among income groups are mixed. Households with annual income above $75,000 and those between $30,000 and $49,999 seem to feel more comfortable with this year’s debt burden than last year’s.
On the other hand, households with annual income between $50,000 and $74,999 and those under $30,000 feel less comfortable with their debt now. Compared to last month’s poll, households with income between $50,000 and $74,999 experienced a significant decline in their comfort level with debt.
The survey was conducted by Princeton Survey Research Associates International and can be seen in its entirety here.