Survey Says Many Investors Unaware of True State of Stock Market
By Vittorio Hernandez | August 26, 2014 9:33 AM EST
A Wells Fargo/Gallup Investor and Retirement Optimism Index study in late June found that many investors are unaware of the true state of the stock market. The bases of that conclusion were the responses of American investors who had at least $10,000 in stocks, bonds, mutual funds, or retirement accounts.
A pedestrian, holding his mobile phone, walks past an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo August 6, 2014. Japanese stocks dropped to a 2-1/2-week low on Wednesday morning, hit by a sharp slide in SoftBank Corp after its U.S. subsidiary Sprint Corp abandoned its bid to acquire T-Mobile U.S. Inc. REUTERS/Yuya Shino (JAPAN - Tags: BUSINESS)
They were asked how much did the US stock market rose in 2013, and their responses varied from zero growth, which 21 per cent of the respondents said, to 10 per cent, which 37 per cent of those surveyed said.
Another nine per cent even thought the market contracted and 25 per cent reckoned it expanded 20 per cent.
However, the S&P 500 actually grew 30 per cent in 2013 and from Jan 1 through Aug 19, it went up 7.2 per cent. Meanwhile, the Dow Jones Industrial Average went up 27 per cent last year and 2.1 per cent so far in 2014.
Noting the varied responses with none close to what the S&P and Dow Jones indices logged, Lydia Saad of Gallup commented, "This extraordinary performance of the stock market over the past 18 months has not fully registered with most investors."
The apparent lack of accurate information on the real state of the financial markets is in contrast with the situation in the 1990s, the height of the dot-com stocks, when every Tom, Dick and Harry was aware of developments.
Finance experts like Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, attributed the apparent lack of interest among investors to their being scarred by the events of the past few years and their portfolios still battered.
Joshua Brown, a blogger and financial advisor, described the current situation as a mania of apathy.
Barry Ritholtz, an investment columnist of Bloomberg, blames the Internet for the investor apathy and anxiety. He explained, "The deluge of Web warnings, along with post-crash traumatic stress syndrome, has investors obsessing over the new market meltdown. They still haven't recovered from the psychic wounds of the last one."
The indifference of investors could be changed if the market would again experience a bull run. However, in the meantime, while waiting for the markets to improve, it would not hurt owners of shares to acquire investor education from various sources.
Such a move would help them make informed choices when to buy or sell their shares. The ability to profit from the market is what convinces investors to continue their trading activities, which in turn contributes to a healthy stock market.
InvestView, Inc. provides and delivers a comprehensive online program of investor education: proprietary investor search tools and trading indicators, weekly newsletters as well as access to live weekly Trading Rooms. It delivers subscription-based financial education courses through InvestView's web site. InvestView also allows new retail investors to use the portal's subscriber information on a 2-week trial period for $9.95.
The company does it through its online education, analysis and application platform that provides analysis, tools, education solutions and an application. InvestView's web-based tools were designed to simplify stock research and improve the investor's research efficiency. One such tool is the Market Point, which is made up of five sections, namely: Charts, Stock Watch, Market, Calendar and Campus.
InvestView offers five training courses that provide an incredible education in the stock market. The five InvestView courses build upon each other. Beginners should take them in the suggested sequence, while more seasoned traders may jump right into the more advanced topics that they are craving to better understand and give them the edge as a successful trader. Each course is offered via live webinar and as a recorded on-demand videos that is immediately posted at the end of each webinar. For more information, please visit their web site.
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