Gallup Poll: Majority of Investors Didn't Benefit From Stock Market Gains

Wednesday, 03 Jul 2013 08:21 AM

By Michael Kling

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A majority of investors got little or no benefit from the stock market's recent gains, according to a recent Gallup poll.

Although the stock market reached a record high in the first quarter and continued to surge, 54 percent of the 1,426 adults having investable assets of $10,000 or more polled said they benefited "a little" or "not at all," while 43 percent benefited "somewhat" or "quite a lot," according to the Wells Fargo/Gallup Investor and Retirement Optimism Index survey.

Still, most (87 percent) didn't change their investment strategy and don't regret their decision. Forty-nine percent said they are long-term investors and don't change their portfolios often, 29 percent said they didn't have additional resources available and 10 said there was too much risk.

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

One in 10 investors said they increased their investments, while 2 percent decreased their holdings.

The Federal Reserve's stimulus effort succeeded in getting many investors to view traditionally more risky investments like stocks and real estate as good investment options, according to Gallup.

In late May, as the markets peaked, 62 percent of the investors accurately anticipated a correction. Still, 80 percent of those anticipating the correction made no adjustments to their investment allocations, while 16 percent in that group moved into what they perceived as safer investments.

Investors believe stocks/mutual funds (34 percent) and real estate (33 percent) are the best investment categories over the next 10-plus years, according to the survey. Far fewer chose gold (11 percent), savings accounts/CDs (10 percent) or bonds (8 percent).

Over the past 12 months, investors were most likely to have increased their holding of savings accounts/CDs, (37 percent), while 14 percent decreased them.

By increasing their holdings in CDs and savings accounts, investors made the decision to give up yield, but preserve their capital during market downturns, Gallup notes.

"Recent events suggest that, for at least some part of their balanced portfolios, this was probably wise for average investors — particularly older investors."

The Dow rose 13.8 percent and the S&P 500 12.6 percent in the first half of the year, but some experts believe the stock market has become increasingly volatile as investors fear the Fed's exit from its stimulus efforts.

"The U.S. stock market is trying to come to terms with the fading and eventual end of quantitative easing and determine the impact of higher interest rates," Bob Baur, chief global economist at Principal Global Investors, tells The Wall Street Journal.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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