Despite Changed Environment, American Investors Uphold Strategy

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

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Dec 08, 2010, 01:35 ET

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
	Total	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
	Total	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