TD Ameritrade Survey: Investors Rank Issues Affecting Their Confidence – or Lack Thereof – in the Stock Market
The economy, market performance and fiscal spending are the issues weighing the heaviest on retail investors' confidence in the stock market today, according to the latest Investor Sentiment Poll released by TD Ameritrade Holding Corporation (NYSE: AMTD). Surprisingly, market “glitches,” which have received ample media coverage, were largely ignored by investors – 92 percent of those surveyed didn't consider it their first, second or even third biggest concern.
“There is a great deal of uncertainty in the macroeconomic environment today, and retail investors have chosen to take a step back and wait for some of it to clear,” said Tom Bradley, president of retail distribution, TD Ameritrade, Inc. (“TD Ameritrade”), a broker dealer subsidiary of TD Ameritrade Holding Corporation. “Investors are focused on what they see every day – jobs or the price of a gallon of milk or a tank of gas – and they are not sure what those things will look like down the road. Once we start to see some clarity, we believe investor confidence will build and they will return to the markets.”
Caution amidst economic uncertainty
When asked to rate their confidence in the stock market as a good place for their long-term investments on a scale of 1 to 10, with 1 being unconfident and 10 being highly confident, retail investors were largely neutral, giving a mean response of 6.40. Additionally, 59 percent investors said that their confidence has changed in the last 2 to 3 years, and among those investors, 52 percent said that they are less confident today and 48 percent said they are more confident.
Many investors surveyed expressed a desire to take on less risk in the current market environment (32%) or claimed they invested less in the stock market over the last six months (29%). However, they remain engaged, as 87 percent said that they continue to monitor their portfolios with the same or greater frequency than they did six months ago. And, despite their continued sense of caution, most investors (66%) admitted that their portfolios are better off than they were four years ago.
Among the issues causing retail investors the greatest reason for pause were:
- Economic issues (housing, unemployment, stimulus, etc.) – 71 percent
- Federal spending or deficit issues – 52 percent
- Political gridlock or upcoming elections – 44 percent
- General market performance – 41 percent
Recent technology issues affecting the retail investor experience, ranging from problems with high-profile IPOs to trading “glitches” and other issues affecting market participants, have had little effect on the retail investor's psyche. Just fewer than 8 percent of investors surveyed said technology issues have affected their confidence in the stock market.
Economic concerns drive voting decisions
Macroeconomic concerns also carried the most weight when it came to the issues most influencing investors' voting decisions in this year's presidential election. Not surprisingly, economic issues were considered most influential overall (42%), followed by fiscal spending/deficit (35%) and social or environmental issues (15%). Demographics impacted these results. See the attached infographic for a detailed breakdown.
“Investors are very engaged voters. Many pay close attention to the economy and markets, so it's not surprising that these are such big factors in how they will vote in this election,” Bradley continued. “Regardless of the outcome, the hope is that the election will result in our leaders coming together to make critical decisions that provide clarity on key issues. Ultimately, this could lift some of the uncertainty that has been weighing on investors and the markets since the onset of the financial crisis.”
How much of an election barometer are investors? Consider that 94 percent of investors surveyed said they voted in the 2008 presidential election. That compares to the total voter turnout of just 64 percent.* The same number of investors said they will vote again in 2012.
For investors requiring added guidance in pursuing their long-term investment goals, Amerivest, an investment advisory affiliate of TD Ameritrade, has solutions that may help them take control of their financial future. For professional money management and financial planning assistance, TD Ameritrade's AdvisorDirect™ service can refer investors to a knowledgeable, independent registered investment advisor (RIA) who can help them pursue their investment goals.**
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Amerivest is an investment advisory service of Amerivest Investment Management, LLC, a registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade, Inc. and Amerivest Investment Management, LLC are both wholly owned subsidiaries of TD Ameritrade Holding Corporation. Amerivest is a trademark of TD Ameritrade IP Company, Inc. Amerivest provides non-discretionary and discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Amerivest Disclosure Brochure (ADV Part 2).
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About the Survey
1,089 investors participated in an online survey conducted by Research Now on behalf of TD Ameritrade Holding Corporation on September 14 – 24, 2012 and offered their views on economic conditions and outlook for the market in general. These investors have at least $10,000 in investable assets, own securities in brokerage accounts, are 18 years or older, are involved in managing their portfolios, and have traded securities at least once in the past 12 months. The 1,089 survey respondents represent a random sample of investors selected from a consumer panel of individuals in the U.S. who have access to the Internet. The margin of error in this survey is ±3.0%. This means that in 19 cases out of 20, survey results based on 1,089 respondents will differ by no more than 3.0 percentage points in either direction from what would have been obtained by seeking the opinions of all eligible individuals in the U.S. who are online. Research Now and TD Ameritrade Holding Corporation are separate, unaffiliated companies and are not responsible for each other's products and services.
About Research Now
Research Now is the leading global online sampling and online data collection company. With over 6 million panelists in 38 countries worldwide, Research Now enables companies to listen to and interact with real consumers and business decision makers in order to make key business decisions.
*United States Census Bureau, http://www.census.gov/newsroom/releases/archives/voting/cb09-110.html
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