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AMERICA'S SMALL INVESTORS ARE ANXIOUS BUT NOT READY TO HIT THE
PANIC BUTTON YET
----PBS Nightly Business Report/America's Research Group Survey
Gauges The Mood of Small Investors ----
New York, New York, April 2, 2001
The small investor has taken a wait-and-see stance towards the stock
market and the economy in general, says a survey created for PBS's
Nightly Business Report by America's Research Group (ARG). "58.2
percent of the investors surveyed are holding fast on their investments,"
says C. Britt Beemer, chairman of ARG. "Maybe it's because
only 3 in 10 small investors will need to access their money in
the next 8 years, or only 1 in 10 expect to need access within 3
years. Though clearly concerned over recent stock market losses
and bad financial news, they still feel they have time to see what
ARG surveyed 1,002 investors last week, asking them how they felt
about the current bear market. Qualifying respondents had $25,000
invested either in the stock market, mutual funds, or in their 401k
retirement accounts. Their mood in light of the gloomy financial
news is cautious:
- 47.7% of Americans are feeling less confident about the US economy
with only 12.4% being more confident. This negative rating is
at a dangerous level putting America into a "recession mindset"
- The small investor is even more leery of the stock market with
a ratio of 7 to 1 feeling less confident about the stock market
than just three months earlier
- 7 out of 10 small investors think America is in a bear market
and few of them believe the situation will reverse until the fall
or into next year
- While 58.2% are in a wait-and-see attitude, 28.5% believe it
is a good time to invest now in the stock market
- Most (57.4%) believe the worst is not over. And only 32.3% want
to "go it alone." 52.1% will now rely more on an advisors
help in managing their investments
- 1 in 5 monitor their investments every day with 3 in 10 following
their investments at least 2 times a week up to every two days
- By a vote of 64.6% to 30.2%, investors didn't think the Fed
lowered interest rates enough last week. Of those who disapproved,
59% wanted to see a full 1% drop and 41% wanted 3/4 of a point.
26.3% blamed Alan Greenspan for not acting more quickly, but only
21.0% believe he should step down as Chairman of the Federal Reserve
- 21.3% have cut back spending due to their market losses, and
27.4% have reduced their spending because of their fears about
- 19.4% have reduced or cut back on vacation plans (a big number
of households in the US)
- Nearly 1 in 2 believe additional major layoffs will occur in
the near future and this will cause them to work longer hours
at a rate of 3 to 1
- 59% distrust the media who they believe has made the economic
slowdown a bigger story than it should be
"When 12% of consumers reduce their spending, that is serious
for the retail sector," says Beemer, "but reductions on
spending of 21% by consumers based upon of stock market concerns
and 27% because of fears about the economy tell us that a broad
segment of America clearly is in a recession mindset."
C. Britt Beemer is available for interviews.
For more information Contact America's Research Group.
America's Research Group, Ltd. (ARG), is a full service consumer
behavior survey research company with more than 20 years experience.
ARG has interviewed more than 4 million consumers. Utilizing both
quantitative and qualitative research, the firm works with clients
to develop practical and successful marketing strategies for pace-setting
companies in the fields of home furnishings, appliance and electronics
retailing, banking and finance, automobile dealers, department stores,
specialty and mass merchants. Clients include Sealy Mattress, Barnes
& Noble, AT&T Wireless, Eckerd Drugs, Broyhill Furniture,
Thomasville Furniture, American Eagle Outfitters and many others.
ARG claims a plus or minus 3.8% accuracy.
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