Despite Changed Environment, American Investors Uphold Strategy

Many investors have not changed investment approach in terms of strategy or decision-making

Dec 08, 2010, 13:35 ET from Harris Interactive

NEW YORK, Dec. 8, 2010 /PRNewswire/ -- Despite the economic crisis in the United States which began (per the National Bureau of Economic Research) in December of 2007, only one in five U.S. adults say they have changed their investment strategy recently, compared to a few years ago (21%)—17% say they have shifted toward more conservative or stable investments and very small numbers say they have shifted toward more aggressive or volatile investments (4%).  Almost two in five Americans (38%) say that they have not changed their investment strategy compared to a few years ago; slightly more say they do not make financial investments (42%).

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These are some of the findings of a new 24/7 Wall St./Harris Poll survey of 2,104 U.S. adults surveyed online between November 18 and 22, 2010 by Harris Interactive.

Among those Americans who make financial investments, two in five say they have changed to either narrow or diversify their investments recently (38%).  It is unclear which strategy is preferred though, as equal numbers of investors say they have increasingly diversified their investments (17%), as say they've narrowed or focused their investments recently (16%).  The majority of investors say again, however, that they have not changed their investment strategy (62%).  

Decision Making

Other findings of this survey include:

  • Among Americans with financial investments, two in five say that they make their own investment decisions without the help of a financial advisor (42%);
  • One in five say that they make most investment decisions but use a financial advisor for specialized needs (21%);
  • Just under one in five say they rely on a financial advisor to make most or all of their investment decisions (17%); and,
  • One in ten say they regularly consult with a financial advisor but make most of the financial investment decisions themselves (11%).  

Although similar numbers of younger and older investors say they make their investment decisions themselves, the more investable assets one has, the less likely they are to do this:

  • Six in ten of those with less than $10,000 in investable assets say they make investment decisions themselves (58%), compared to 46% of those with between $10,000 and $99,999 to invest, 36% of those with $100,000 to $499,999 to invest, and just a third of those with $500,000 or more to invest (33%).

When American investors were asked if their strategy regarding making investment decisions has changed from what it was several years ago, the majority again confirm that they have not made any change (63%); one in five say yes, they rely on themselves now more than previously (19%) and one in ten say the opposite, that they rely on a financial advisor more now (11%) than they used to.

Looking Ahead

When investors were asked to think about how their investments might change over the next five years, the data further supports the idea that American investors are remaining constant in their choices—one third say they don't expect to change the amount they invest over the next five years (30%) while greater numbers show even more confidence and say they expect to increase the amount they invest over the next five years (39%).  Consistent with the needs and priorities at different life stages, younger adults are more likely to say they will increase the amount they invest (51% of those 18-34 and 56% of those 35-44) over the next five years, compared to older American investors, 55 and older, who say the same (20%).  Only 16% of investors overall say they expect to decrease or spend-down the amount they invest over the next five years.  

So What?

While we know that Americans have made many small changes as a result of the difficult economic times, from this report it seems as if Americans have taken the opposite approach, holding steady, with regard to their financial investments.  Looking ahead, it seems that Americans are not entirely discouraged either with large numbers of investors expecting to remain constant, or even increase the amount they invest, in the future.  Thus, while the economy has yet to fully recover, American investors remain strong and confident in their choices, holding steady with their chosen strategies rather than letting their emotions get the better of them—a long-term approach frequently praised, which hopefully will reap rewards for these investors as the economy begins to grow.

TABLE 1

CHANGED INVESTMENT STRATEGY

"Overall, would you say that you've changed your financial investment strategy recently, compared to a few years ago?  Please choose the statement below that describes you best."

Base: All U.S. adults


Total

Age

Education

18-34

35-44

45-54

55+

H.S. or less

Some college

College grad +

%

%

%

%

%

%

%

%

Makes financial investments (NET)

58

46

62

60

67

45

57

81

 Changed strategy (NET)

21

14

19

21

26

15

19

32

   Yes, I've shifted toward more

    conservative/stable investments.

17

10

12

17

25

12

15

26

   Yes, I've shifted toward more

    aggressive/volatile investments.

4

5

7

4

2

3

3

6

  No, I have not changed my investment

  strategy.

38

32

43

39

40

31

38

49

Not applicable – I do not make financial investments.

42

54

38

40

33

55

43

19






Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

Makes financial investments (NET)

58

43

75

95

93

48

 Changed strategy (NET)

21

12

26

34

59

16

   Yes, I've shifted toward more

    conservative/stable investments.

17

8

19

31

43

15

   Yes, I've shifted toward more

    aggressive/volatile investments.

4

4

7

3

15

2

   No, I have not changed my investment

    strategy.

38

31

49

60

34

32

Not applicable – I do not make financial investments.

42

57

25

5

7

52




Note: Percentages may not add up to 100% due to rounding

TABLE 2

DIVERSIFIED OR NARROWED INVESTMENTS

"How, if at all, have you changed your investment

strategy recently?  

Please choose the statement below which best describes you."

Base: All U.S. adults who make financial investments


Total

Age

Education

18-34

35-44

45-54

55+

H.S. or less

Some college

College grad +

%

%

%

%

%

%

%

%

Changed strategy (NET)

38

38

34

41

37

32

37

43

  Increasingly diversified my investments

17

21

22

16

13

9

12

27

  Narrowed or focused my investments

16

12

9

19

20

16

21

12

  Other

5

5

4

6

4

6

4

4

I have not changed my investment strategy

62

62

66

59

63

68

63

57






Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

Changed strategy (NET)

38

29

40

39

64

34

  Increasingly diversified my investments

17

13

18

22

33

13

  Narrowed or focused my investments

16

10

18

13

31

16

  Other

5

7

4

4

*

6

I have not changed my investment strategy

62

71

60

61

36

66




Note: Percentages may not add up to 100% due to rounding; * indicates less than .05%

TABLE 3

TYPES OF INVESTMENTS

"Please indicate how much of your invested assets are in each

type of investment below."

Base: All U.S. adults who make financial investments


Have this type of investment (NET)

Most or all of my assets are invested in this way

Some of my assets are invested in this way

A small percent of my assets are invested in this way

I do not have this type of investment

Not sure

Decline to answer

%

%

%

%

%

%

%

401(k)/403(b) or IRA

65

22

32

10

16

6

13

Property (e.g. house, condo)

56

11

33

11

24

7

13

Mutual funds

45

8

27

10

32

9

14

Individual stocks

43

4

23

17

34

8

14

Bonds

30

2

14

14

46

10

14

Other

26

3

12

11

38

20

16




Note: Percentages may not add up to 100% due to rounding

TABLE 4

DECISION MAKING APPROACH

"The following are some different approaches you might take regarding advice and investment decision
making.  For the majority of your assets, which one of the statements below best describes your
preferred approach?"

Base: All U.S. adults who make financial investments


Total

Age

18-34

35-44

45-54

55+

%

%

%

%

%

I make my own investment decisions without the assistance of a financial advisor.

42

47

43

53

34

I make most of my own investment decisions, but use a financial advisor for specialized needs.

21

23

26

18

20

I regularly consult with a financial advisor and I may also get additional information myself, but I make most of the financial decisions.

11

9

6

10

16

I rely upon a financial advisor to make most or all of my investment decisions.

17

13

18

11

22

Other

8

9

6

9

9






Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

I make my own investment decisions without the assistance of a financial advisor.

42

58

46

36

33

35

I make most of my own investment decisions, but use a financial advisor for specialized needs.

21

13

24

26

31

20

I regularly consult with a financial advisor and I may also get additional information myself, but I make most of the financial decisions.

11

8

9

15

23

11

I rely upon a financial advisor to make most or all of my investment decisions.

17

15

17

19

12

17

Other

8

7

5

3

2

16




Note: Percentages may not add up to 100% due to rounding

TABLE 5

CHANGE IN DECISION MAKING

"Has your approach regarding advice and investment decision making changed from what it was several years ago?"

Base: All U.S. adults who make financial investments


Total

Age

18-34

35-44

45-54

55+

%

%

%

%

%

Yes, I rely on myself to make decisions now more than I did before.

19

19

18

22

18

Yes, I rely on my financial advisor now more than I did before.

11

6

16

12

11

No, there has been no change.

63

62

62

63

66

Not applicable – I did not previously make financial investments.

7

13

5

4

6






Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

Yes, I rely on myself to make decisions now more than I did before.

19

13

21

18

35

18

Yes, I rely on my financial advisor now more than I did before.

11

5

15

12

21

8

No, there has been no change.

63

73

60

68

43

61

Not applicable – I did not previously make financial investments.

7

9

4

2

-

13




Note: Percentages may not add up to 100% due to rounding

TABLE 6

TIME SPENT

"Thinking of the time you usually spend on your financial investments, would you say you spend…?"

Base: All U.S. adults who make financial investments


Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

A lot/A moderate amount of time (NET)

36

22

37

43

72

33

    A lot of time

5

1

5

9

20

2

    A moderate amount of time

31

20

32

33

52

31

Not very much/Almost no time (NET)

55

73

57

54

28

48

    Not very much time

35

39

38

45

18

29

    Very little or almost no time

20

34

19

9

11

19

Not at all sure

5

5

4

2

-

8

Decline to answer

4

1

3

1

-

11




Note: Percentages may not add up to 100% due to rounding

TABLE 7

NEXT 5 YEARS

"Thinking about the next 5 years, do you think you will increase or decrease/"spend-down" the amount you invest?"

Base: All U.S. adults who make financial investments


Total

Age

18-34

35-44

45-54

55+

%

%

%

%

%

Increase (NET)

39

51

56

45

20

    Increase a lot

6

11

13

2

*

    Increase somewhat

33

39

43

43

19

Decrease/"Spend-down" (NET)

16

11

4

12

27

    Decrease/"Spend-down" somewhat

11

10

2

8

19

    Decrease/"Spend-down" a lot

5

1

2

4

8

I don't expect to change the amount I invest in the next 5 years.

30

24

30

25

37

Not at all sure

15

15

10

18

16






Total

Investable Assets

Under $10,000

$10,000-$99,999

$100,000-$499,999

$500,000+

Not sure/Decline to answer

%

%

%

%

%

%

Increase (NET)

39

45

43

37

46

30

    Increase a lot

6

5

7

4

17

3

    Increase somewhat

33

39

36

33

30

27

Decrease/"Spend-down" (NET)

16

11

19

24

24

11

    Decrease/"Spend-down" somewhat

11

5

12

18

23

9

    Decrease/"Spend-down" a lot

5

6

7

6

1

2

I don't expect to change the amount I invest in the next 5 years.

30

29

31

33

29

30

Not at all sure

15

15

7

7

1

29




Note: Percentages may not add up to 100% due to rounding

Methodology

This 24/7 Wall St./Harris Poll was conducted online within the United States between November 18 and 22, 2010 among 2,104 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Where appropriate, this data were also weighted to reflect the composition of the adult online population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.

These statements conform to the principles of disclosure of the National Council on Public Polls.

The results of this Harris Poll may not be used in advertising, marketing or promotion without the prior written permission of Harris Interactive.

The Harris Poll® #151, December 8, 2010

By Samantha Braverman, Project Researcher, Harris Interactive

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what's next. For more information, please visit www.harrisinteractive.com.

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