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Investor Perceptions Colored By Main Street/Wall Street Clash |
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Over the last 12 months the stock market has had one of its biggest increases in history.Yet the average investor claims she has lost money on her portfolio, according to a national poll conducted by the Bloomberg News Service in March.
The bull market has driven the Standard & Poor’s 500 Index up some 73 per-cent since the stock market low of March 9, 2009. Yet only three in 10 Americans polled by Bloomberg said their portfolios had risen in the past year.
Perception tops reality
Economists say this negative view is all perception: most investors, except those who made exceptionally bad choices, have seen their holdings go up since March 2009.
Mark Zandi, chief economist for Moody's Economy.com said Americans had recently been through "the proverbial economic wringer" and that it would take a long time to change perceptions.
Even more important, Americans are not seeing the signs of economic improvement in their everyday lives that Wall Street is rallying on.
Job blues
With unemployment hovering near 10 percent, many Americans know one or more people who are out of work and that personal experience makes them feel negative about economic prospects.
The survey even found that so-called sophisticated investors, those with annual incomes above $100,000, said they had lost money in the last 12 months.
"Economists look at their indicators and the American people see indicators in their everyday life," said Ann Selzer, whose Des Moines, Iowa firm, Selzer & Co., conducted the survey. “It is hard to argue with what people observe in their own communities."
This type of thinking may hurt the prospects of average investors, whose personal experience may cause them to hold back at just the wrong times.
Wall Street rallies are based on prospects six months to a year away. Investors who wait to see signs of a recovery in their own lives and communities may miss out on the rally and instead start investing when stocks have already become expensive, rather than when they are cheap.
©OSB Financial Services, INC rights reserves.Information has been obtained form sources believed to be reliable, but its accuracy and completeness and the options based thereon, are not guaranteed. Always consult your a financial adviser and prospectus before making an investment
©2009, Kelly Ruggles Web site
Kelly C. Ruggles is a fee-based financial planner located in Spokane.
Kelly C. Ruggles, President of American Reliance Group, Inc., a registered investment advisor.
Kelly Ruggles is the author of "The Financial Playbook" for Retirement
Kelly C. Ruggles does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions
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