Despite recent stock market highs, individual investors remain very risk-averse. More than three in four Americans (76%) say they are not more inclined to invest in the stock market with interest rates on savings accounts and CDs at record lows, according to new research from Bankrate.com (NYSE: RATE).
That is the same percentage Bankrate.com measured at this time last year. The percentage of people who are more inclined to invest in stocks increased slightly this year (to 22% from 18%), but that is a negligible change considering the poll’s 3.7% margin of error.
“Although the Fed is trying to push investors into riskier assets in pursuit of better returns, individual investors aren’t biting,” saidGreg McBride , CFA, Bankrate.com’s senior financial analyst.
Of course, this study doesn’t include those already heavily involved in the market. Personally, we’re more inclined to invest in stocks while it continues to rise.
Consumers feeling a little better
Bankrate.com also announced its latest Financial Security Index results. The Index dipped from 101.5 in March to 100.4 in April, but still indicates that consumers are feeling better about their financial security relative to 12 months ago (any figure above 100 illustrates improved financial security). This is only the fourth time in the 29 months since its inception that the Index has registered in positive territory.
“Even disappointing job growth in March wasn’t enough to shake Americans’ upbeat feelings of financial security relative to one year ago,” McBride added.
Americans feel less secure than last year in only one of the Financial Security Index’s five components: savings. Those who feel less comfortable with their current savings outnumber those who feel more comfortable by a ratio of greater than two to one.
They see progress in key areas
Consumers feel they have progressed over the past year in each of the other four components: job security, debt, net worth and overall financial situation. Sentiment regarding savings, debt, net worth and overall financial situation remains correlated with income.
Lower-income households possess the most downbeat levels of security while higher-income households are either the most likely to be upbeat or the least likely to be negative. Not surprisingly, lower-income households are also the least inclined to invest in the stock market due to low interest rates.
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here: