Investors are starting to believe the talk that better times lie ahead.
According to just released 24/7 Wall St./Harris Poll on Investing, many plan to increase the amount of money they invest over the next five years. The poll of 2,104 adults found that 46 percent of respondents with $500,000 or more in assets plan to put more of their money to work. Thirty-nine percent of all respondents said they would be adding to their portfolios. The optimism was seen across most demographics. More than half of investors aged 18-34 (51%) and 35-44 (56%) say they will increase the amount they invest, with over one in ten of each age group saying they will increase the amount a lot (11% and 13%, respectively). Not surprisingly ,older investors who have been burned by the volatile stock markets remain the most cautious because they are the most concerned about their retirements. Only 20% of investors aged 55 and older say they will add to their portfolios while 27% plan to reduce their investment holdings.
This data indicates that the sentiment on Main Street is not that different from Wall Street. Many economists are expecting the U.S. economy to continue its slow, painful recovery next year. The S&P 500 Index has gained about 10 percent this year. Retail sales during the holiday season have proven to be better than expected, at least so far. But, as the survey showed, investors remain worried about getting burned again.
For instance, one in five (19%) of respondents say they rely on themselves to make decisions more now than before. About one in ten (11%) say they rely on financial advisors and 7% say that the question is not applicable since they did not make financial decisions. Most people who have financial investments say they spend not very much time, or very little or almost no time on their investments (55%); just over a third say they spend a moderate amount or a lot of time (36%). Wealthier people, not surprisingly, spend the most time on their investments.
Thirty-eight percent of respondents said they have changed their investment strategy recently, either by diversifying or narrowing their investments. Of those who have changed strategies, 17% of respondents say they have increasingly diversified their investments and 16% say they have narrowed or focused their investments. Sixty-two percent of those who make financial investments say they have not changed their strategy recently. Older people are more likely to have changed their strategies than younger ones.
The generational divide also was seen in attitudes toward gold investing.Two in five American adults (42%) say gold is usually a good investment. That’s not surprising given that gold reached a record high in 2010 and is constantly touted on cable television. Forty-four percent of investors aged 45-54 and 55 and older say the precious metal is a good investment compared to 35% of Americans aged 18-34 who say the same. One-third of investors say gold is a good investment when the economy is bad.
What remains unclear from the survey is if Wall Street is following Main Street or vice versa.