Tags: stock | market | Gallup | individual

Yahoo: The Little Guy Is Sitting Out the Highest Stock Market on Record

By    |   Thursday, 03 April 2014 03:12 PM

Wall Street is leaving Main Street behind, as most Americans prefer to put their money in safe investments rather than risk it in the high-flying stock market, according to Yahoo.

Yahoo pointed to a new Gallup survey showing that 72 percent of those with less than $100,000 prefer to invest in low-risk assets such as bonds, savings accounts or even cash.

The general risk aversion among individual investors is not confined to older Americans — in fact, 58 percent of those aged 18 to 44 preferred the safer approach with their savings.

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Yahoo Finance reporter Lauren Lyster said the pace of the economic recovery has left young investors with doubts about taking economic risks.

"Beyond the unemployment, so many people are struggling with stagnant wages, part-time work and things that just don't allow them to save."

She noted many Americans have little more than one month worth of savings, so fear putting their money in a volatile stock market. Those with so little to fall back on "need the optionality of having that cushion in cash. What happens if something goes wrong?"

Against a backdrop of stocks hovering around all-time highs this month, Americans apparently feel scorched by them, having endured recent market meltdowns in 2000 and 2008, plus a few substantial corrections in between.

The Gallup poll found almost two-thirds of investors want their investment be secure even if growth is low.

Male investors showed greater tolerance for risk than female investors. But again, the majority of both groups — 57 percent of men and 72 percent of women — reported that having a guarantee that their principal is secure is better than having high growth potential.

In a public statement, Charles Schwab, founder of the eponymous discount brokerage, lambasted the fresh controversy of high-frequency trading as something Wall Street needs to curb.

Schwab said "high-frequency trading has run amok and is corrupting our capital market system by creating an unleveled playing field for individual investors and driving the wrong incentives for our commodity and equities exchanges. The primary principle behind our markets has always been that no one should carry an unfair advantage. That simple but fundamental principle is being broken."

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InvestingAnalysis
Wall Street is leaving Main Street behind, as most Americans prefer to put their money in safe investments rather than risk it in the high-flying stock market, according to Yahoo.
stock,market,Gallup,individual
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2014-12-03
Thursday, 03 April 2014 03:12 PM
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