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Old 08-21-2014, 07:32 AM
 
29,845 posts, read 34,929,245 times
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While the thread title might not surprise you the surveyed audience probably will it did me.
Most Americans clueless about market performance

Quote:
Most Americans don't realize the stock market gained 30 percent last year, and only 1 in 9 call themselves savvy about investing, according to a recent survey.

Gallup found that 37 percent of those polled believe the market increased 10 percent in 2013, a year in which the S&P 500's total return was 32 percent. Just 7 percent recognized the 30 percent gain, and 9 percent thought stocks actually decreased.

Those results mesh with a general distrust of the market. Given the choice of what to do with an extra $10,000 in cash, 41 percent said they would put it in the market, but 36 percent opted for cash and 20 percent chose a near-zero yielding certificate of deposit.

The sample audience wasn't exactly random, either: The Wells Fargo/Gallup Investor and Retirement Optimism Index poll asked questions of investors with at least $10,000 in stocks, bonds, mutual funds or in retirement programs such as a 401(k) or IRA.
This just gives added weight to other articles and retirement documentaries that won't be mentioned so as to avoid upsetting some folks.

Seems like it isn't just the quality of the retirement vehicles offered and the salesmen of the those products but the buyers and owners have some serious shortcomings. Ya think? I suspect that while many may not know the overall market results they probably know how their own portfolio perfomed which because of AA was not the same as the market. In fact with fees and low performance maybe they did lose money. Retirement readiness is a serious problem and it isn't always a result of a lack of just effort.
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Old 08-21-2014, 07:47 AM
 
Location: Great State of Texas
86,093 posts, read 72,631,548 times
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I remember when 401Ks first came out. So many people didn't know about the stock market and just plopped their money into the funds recommended by the newsletters.

I am so thankful that I had 10 years working on Wall Street which included getting my broker's license.
While it was not the industry for me (not a salesman type person) it was an education that benefited me all these years.

Little to nothing is taught in K-12 about this so you either learn it on your own or just follow newsletters and articles.
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Old 08-21-2014, 07:55 AM
 
29,845 posts, read 34,929,245 times
Reputation: 11771
Quote:
Originally Posted by HappyTexan View Post
I remember when 401Ks first came out. So many people didn't know about the stock market and just plopped their money into the funds recommended by the newsletters.

I am so thankful that I had 10 years working on Wall Street which included getting my broker's license.
While it was not the industry for me (not a salesman type person) it was an education that benefited me all these years.

Little to nothing is taught in K-12 aboute this so you either learn it on your own or just follow newsletters and articles.
Some high school curriculum will track individual stocks but mutual funds and other investment vehicles not likely. Doing that would become more controversial and product /vendor specific.
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Old 08-21-2014, 08:03 AM
 
Location: Great State of Texas
86,093 posts, read 72,631,548 times
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Quote:
Originally Posted by TuborgP View Post
Some high school curriculum will track individual stocks but mutual funds and other investment vehicles not likely. Doing that would become more controversial and product /vendor specific.
My son had that in an economic class which was an elective.
But they really didn't teach investing. It was one of those simulation programs where they hand you $xxxx and at the end of a time period see which student got the most money. And it was only for a short period in that class.
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Old 08-21-2014, 10:38 AM
 
Location: Prescott AZ
6,134 posts, read 9,111,221 times
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I learned a little from watching Jim Cramer (Kramer?) on TV and opened 2 small accounts at Scottrade a few years back.

My current investment strategy is to not look at the accounts at all. It works best that way and lately, I am pleasantly surprised.
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Old 08-21-2014, 11:02 AM
 
6,329 posts, read 4,771,440 times
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I follow the market overall and personally I count last year's performance at about 20%, not 30%. 2013 started at a little down blip and ended on a little peak. I follow the djia so results might be slightly different for the sp. In any case if you average out the small peaks and valleys, performance for 2013 was very close to 20%. In fact for the past 5 years, that has been the case with average performance of a bit less than 20%. Unfortunately for those of us who are cautious and diversified, overall investment performance is likely to be considerably worse. Due to a mix of cash, bonds, and other fixed return assets, my portfolio has returned under 15%. So that 37% opinion group is closer to reality than the authors of the condescending article.
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Old 08-21-2014, 11:10 AM
 
29,845 posts, read 34,929,245 times
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Quote:
Originally Posted by jrkliny View Post
I follow the market overall and personally I count last year's performance at about 20%, not 30%. 2013 started at a little down blip and ended on a little peak. I follow the djia so results might be slightly different for the sp. In any case if you average out the small peaks and valleys, performance for 2013 was very close to 20%. In fact for the past 5 years, that has been the case with average performance of a bit less than 20%. Unfortunately for those of us who are cautious and diversified, overall investment performance is likely to be considerably worse. Due to a mix of cash, bonds, and other fixed return assets, my portfolio has returned under 15%. So that 37% opinion group is closer to reality than the authors of the condescending article.
The article was not about individual performance but knowledge of overall market performance. You knew what the market did. 9% felt the S&P fell last year.
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Old 08-21-2014, 12:04 PM
 
Location: Central Massachusetts
4,800 posts, read 4,862,845 times
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Quote:
Originally Posted by jrkliny View Post
I follow the market overall and personally I count last year's performance at about 20%, not 30%. 2013 started at a little down blip and ended on a little peak. I follow the djia so results might be slightly different for the sp. In any case if you average out the small peaks and valleys, performance for 2013 was very close to 20%. In fact for the past 5 years, that has been the case with average performance of a bit less than 20%. Unfortunately for those of us who are cautious and diversified, overall investment performance is likely to be considerably worse. Due to a mix of cash, bonds, and other fixed return assets, my portfolio has returned under 15%. So that 37% opinion group is closer to reality than the authors of the condescending article.

Just a point on the above highlighted and underlined statement. The DJIA is not a very good market indicator. It covers only a very small segment of the market. The S&P covers a much broader spectrum and it a better indicator of the market.

A mutual fund that follows the S&P will do much better then one following the DJIA for the faint at heart. Too many wild swings for the majority of investors.
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Old 08-21-2014, 12:33 PM
 
Location: Florida -
8,772 posts, read 10,876,703 times
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From another perspective, I'm not sure that I really care what 'the market' is doing enough to spend my retirement years chasing stocks up and down. That doesn't mean that I'm unconcerned about the economy or our kid's/grandkid's future. But, I'm pretty much convinced that I have little or no control over the 'market' or economy ... and can't or even reliably predict where it or my individual stocks/funds are going. Thus, I've divested to the point where we are not dependent on those 'mysterious market forces' that seem to chronically worry so many folks (retired and otherwise).

Personally, we've got a couple of 'managed equity accounts' that produce a reasonable 9-10-percent annually. Otherwise, we are relatively comfortable with our secure pension, SS and an annuity; and have also 'covered our bases' with LTC policies, Life Insurance, and no mortgages or debt, etc. Don't get me wrong, we are anything, but, wealthy, but, we are comfortable (or at least content) ... Also, I'm pretty sure that we've got enough 'old stuff and fancy new stuff' to last us for some time to come -- Plus, we aren't going to starve anytime soon and our health is pretty good. Our kids and their families also work hard at good jobs and manage their own lives and affairs well.

I've almost reached the same point with regard to the redundant daily news editorials that all of the frantic 'talking heads' are always in such a dither about. One need only change the names and locations on a 'monthly news report' to discover that little or nothing really changes. I'm not really apathetic, but, spent many years researching the news and other reporting and learned that very little of what we are told on TV or in the news is accurate anyway. For the same reason, I rarely even watch TV commercials, but, record almost everything. And, does anyone truly believe that our illustrious politicians are suddenly going to change 'their personal entitlement system' or anything else to make a measurable difference? ... even though I continue to vote, as always?

I'm neither cynical, apathetic or resigned, but, simply see no further point or purpose in getting all 'lathered-up' every day about things (like the 'state of the market') that I can do nothing to control or change.

Last edited by jghorton; 08-21-2014 at 12:58 PM..
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Old 08-21-2014, 12:45 PM
 
Location: Las Vegas, NV
354 posts, read 250,982 times
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Quote:
Originally Posted by TuborgP View Post
While the thread title might not surprise you the surveyed audience probably will it did me.
Most Americans clueless about market performance



This just gives added weight to other articles and retirement documentaries that won't be mentioned so as to avoid upsetting some folks.

Seems like it isn't just the quality of the retirement vehicles offered and the salesmen of the those products but the buyers and owners have some serious shortcomings. Ya think? I suspect that while many may not know the overall market results they probably know how their own portfolio perfomed which because of AA was not the same as the market. In fact with fees and low performance maybe they did lose money. Retirement readiness is a serious problem and it isn't always a result of a lack of just effort.
"Market performance" has nothing to do with client returns. No intelligent person would have their entire net worth invested in the market, and thus, their returns will never reflect the market.

That said, most people are incredibly ignorant to the real world. They believe the economy is bad because their own personal finances are not so good. As an investment analyst, I meet with people who manage billions of dollars (had a meeting an hour ago with 2 men who manage a combined $75,000,000,000 between them) and their inflows of assets are huge and the expansion of the various investments they have are all pretty significant. The world has enjoyed astronomical growth since 2009, but if you ask the "guy on the street" he'd say "WE'RE IN A DEPRESSION!!!" even though the facts prove otherwise.

Most retirement plans are designed where a person can easily create themselves a decent portfolio. This idea that shady salesmen only give them bad investments is simply false. If you work for Walmart, you have investment choices in most major asset classes plus target date funds. Plus, most Americans can simply invest their $5,000 into their IRA and manage their own investments.

Simply put, if you don't know about the performance of the market, it's your fault for being ignorant.
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