"investor survivor skills survey" by opinion research corporation
TRANSCRIPT
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8/14/2019 "Investor Survivor Skills Survey" by Opinion Research Corporation
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Founded1938
InvestorSurvivalSki
llsSurve
y
InvestorSurvivalSkillsSurve
y
Preparedfor
Preparedby
AnE
xaminationofInvestorKnowledgeandBehavio
r
AnE
xaminationofInvestorKnowledgeandBehavio
r
December13,
2005
SecuritiesInvestorProtectio
nCorporationandInvestorProtectionTrust
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InvestorSurvivalSkills
TABLE
OFCONT
ENTS
TABLE
OFCONTENTS
Page
METHODOLOGY................................................................................................................................................
3
EXECUT
IVESUMMARY...................................................................................................................................
4
DETAILEDFINDINGS.....................................................................................................................................
10
APPEND
IX.........................................................................................................................................................
45
Questi
onnaire
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Execu
tiveSummary
Execu
tiveSummary
March2000
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InvestorSurvivalSkills
Executive
Summary
Executive
Summary
Thevastm
ajorityofAmeric
aninvestorsdonotappeartopossessthe
basicinvestorsurvivalsk
illsneededtobuildtheirsavingsintoa
retirement
nestegg.
A
SecuritiesInvestorProtectionCo
rporation
(SIPC)/InvestorProtection
Trust(IPT)surv
eyconductedby
Opinion
Research
Corporation(ORC)gaugedtheknowledgeandbe
haviorof
investorsw
hoeithermanag
edtheirownaccountsorrelyupon
financial
professionalstodoso.
KeySIPC/IPT
findingsincluded
thefollowing:
Morethan
fouroutoffiveinvestors(83%)flunkedtheoveralltestofkey
knowledge
andbehavior.O
nly17%ofrespo
ndentscorrectlyanswered
a
sufficien
tnumberofquestionson
knowledge
(sixout
ofeight
questions)
andbehavior(threeoutoffourquestions).Wom
enwere
substantiallymorelikelytha
nmentofailthe
overalltestbyamarginof
91%to77%.
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InvestorSurvivalSkills
Executive
Summary
Executive
Summary
Twoofthe
handfulofbrightspotsinthes
urveyfindingshavetodo
withaccou
ntstatementsanddiversification.
Onthe
behaviorside:90%
oftheinvestors
saidthattheyregularlyread
theirbrokerageaccountan
d/ormutualfundstatements.Only9%
indicated
thattheydidnotdoso.Anumberoforganiza
tionsincludingSIPChave
placedamajoremphasis
ontheneedforinvestorstoprotectthemselves
byrevie
wingtheiraccountstatementsindetail.
On
the
knowledge
side:nearly
threeoutoffourinvestors
(74%)
demons
tratedthattheyunderstandtheconceptofdiversification,
whichhas
beena
majorfocusofinve
storeducationeffo
rtsbytheInvestor
Protection
Trustandothergroups.
Otherkey
investorbehaviorfindings:
Few
erthanthreeoutoffive
investors
(58%)said
thatthey
haveeverread
aprospectus.
Additionally,morethanthreeoutoffourin
vestors(77%)claimedto
haveafina
ncialplanofsom
esortinplace.
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InvestorSurvivalSkills
Executive
Summary
Executive
Summary
Oneinfiv
einvestors(21%
)saidthattheypracticeallfourofthe
desirable
behavioraltraits
focused
on
in
the
survey:
reading
prospectuses,regularlyreviewingaccountstatements,checkingoutthe
disciplinarybackgroundsofbrokers/financia
lplanners,and
havinga
financialplaninplace.
Oneinfourinvestorsprov
idedenoughcorrectanswersto
passthe
knowledge
portionofthe
surveytest.O
nly1%
ofthe
investors
answered
alleightquestionscorrectly.
Fewerthenthreeinfive
investors(57%)providedasufficientnumber
ofcorrectanswerstopass
thebehaviorsideofthesurvey.
Mostdistu
rbingresultonbehavior:
Onlyslightlymoretha
nathird
(36%)ofinvestorshavech
eckedoutthedisciplinarybackgroundsof
theirstockbrokerand
or
financialplanne
r.
Perhapsev
en
more
disturbingly,sevenoutof10
thosewhodidn
otcheckouttheirfinancial
plannersbackgroundindic
atedthattheydidsoeitherbeca
usethey
trustedthe
individualinquestion(61%)ortheindividualhad
assured
themthattherewasnothing
tobeconcerned
about(9%).
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InvestorSurvivalSkills
Executive
Summary
Executive
Summary
Mostdistu
rbingresultsontheknowledgeside:Fewerthanonein10
investors(8%)understandt
hatNOagencyororganizationinsuresyou
againstlos
ingmoneyasthe
resultoffraudin
yourinvestmentportfolio.
Atotalo
ffouroutfiveinvestorsincorrectlyidentifiedoneorm
oreofthe
followingentitiesasprovidingsuchinsurance:
SecuritiesandExchangeCommission(42percent)
FederalDepositInsuranceCorporation(41perc
ent)
SIPC(23percent)
Anotherindicationoftheweakstateofinvestorknowledge
:Fewer
thantwo
infiveinvestors
(39%)understandhow
salesfeesand
commissio
nsworkintheno-loadmutualfun
dcontext.Anea
rlyequal
numberof
investors(38%)
answeredtheno-loadquestionincorrectly
andanoth
er12%
eitherindicatedtheydid
notknow
orrefusedto
providean
answer.
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InvestorSurvivalSkills
Executive
Summary
Executive
Summary
Otherkey
investorknowledgefindings:Only
41%understand
thebond
investingb
asicrulethatasinterestratesgou
p,bondpriceste
ndtofall.
Morethan
aquarterofinvestors(28%)predictedbondswillmoveinthe
wrongdire
ction,16%
said
bondpriceswouldremainthesame,and
14%eitherdidntknoworre
fusedtoanswer.
Fewertha
n
three
in
five
investors(57%)can
correctly
define
a
prospectus.
Aboutthre
eoutoffiveinvestors(61%)und
erstandthatmos
tbrokers
and
financialplannersare
compensated
through
commis
sionson
productssales.
Twoouto
fthreeinvestors
understandthat
stockshavehad
thebest
long-term
returnforinves
tors,compared
tothosewhoincorrectly
identifiedC
Ds(14%),bonds
(11%)andsavin
gsaccounts(2%).
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Deta
iledFinding
s
Deta
iledFinding
s
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InvestorSurvivalSkills
AProfileofInvestors
AProfileofInvestors
Asascre
eningquestion,
allrespondents
wereaskediftheyown
securities,
whichweredefinedasmutualfund
s,stocksorbond
s.Forty-
sixpercen
tofallrespondentssaidtheydoownoneormore
ofthese
securities.
Theyareconsideredinvestorsforthepurpose
softhis
study.
Menareslightlymorelikelythanwomentosaytheyareaninve
stor(50%
vs.43%
.)
Theyoungestrespondents
aged18-24years
ofagearethelea
stlikelyto
beinve
stors(11%).More
thanhalf(54%)of
thoseaged35-64
ownsome
securitiesandareinvestors.
Thehig
hertheeducationlevelandtheincom
elevelofthehous
ehold,the
morelikelytheresponden
tistobeaninves
tor.Only17%
of
thosewith
lesstha
n$25,000inhouseholdincomearein
vestorscompared
to73%
of
thosew
ithincomesof$75,000ormore.Similarly,only17%on
thosewith
lesstha
nahighschooleducationareinvestorscomparedto66%
ofthose
withac
ollegedegree.
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InvestorSurvivalSkills
AProfileofInvestors
AProfileofInvestors
46%
50%
3%
Yes
NoDon'tknow
Base:Totalrespondents.
QA1:Areyouaninvestor,t
hatis,doyouownsecuritiessuchasmutualfunds,stocks,bon
ds,e
tc.?
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InvestorSurvivalSkills
TypesofS
ecuritiesHeld
TypesofS
ecuritiesHeld
Noonefor
mofinvestingispreferredoveranother.Slightlymo
rethana
third(37%
)investthrough
aretirementpla
n,28%
investd
irectlyor
throughabroker,planneror
advisor,and31%
doboth.
Investorsinhouseholdsw
ithlessthan$35,000inincometendtoinvest
themselvesorthrougha
broker,planneror
advisor(44%).T
hosewith
householdincomesof$35
,000tolessthan$50,000tendtoinve
stthrough
aretirementplan(50%)andthosewith$75,000ormorein
household
income
tendtoinvestusing
boththesemethods(44%).
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InvestorSurvivalSkills
TypesofS
ecuritiesHe
ld
TypesofS
ecuritiesHe
ld
28%
37%
31%
3%
0%
20%
40%
Directlyorthrough
broker,adviso
r,planner
Throughretirementplan
Both
Don'tknow
QA2:Doyouinvestdirectlyorthrougharetirementplan?
Wouldyousayyouinvestdirectlyyourselforthroughabrokerorfinancialplannero
investmentadvisor,in
vestthrougharetirementplan,orboth?
Base:Investors,n=927.
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InvestorSurvivalSkills
Investm
entKnowle
dgeandBehavior
Investm
entKnowle
dgeandBehavior
Thissurve
yaskedeightinvestmentknowledgequestions
andfour
investmentbehaviorquestions.Theanswersgivenweregradedand
responden
tsweregivenapassingorfailings
core.
Only17%
ofinvestorswhoinvestdirectly
withabroker,a
dvisoror
financialp
lannergetapassingscore.
To
earnapassing
score,a
responden
thastoanswer
sixoftheeight
knowledgequestionsand
threeofthefourbehaviorqu
estionscorrectly.
Menarealotmorelikelythanwomentorece
iveapassingscore
(23%
vs.
9%).
Thosea
ged45-54alsoare
alotmorelikelyto
getapassingscore(24%).
Respon
dentswithhouseholdincomesof$75
,000ormore(24%
)orthose
withac
ollegedegree(23%
)arealsomorelike
lytopass.
Amongthe
eightknowledgequestions,theaveragenumberofcorrect
answersw
as4.2.Forthe
behaviorquestionstheaverage
was2.6.
Onlyafou
rthansweredeno
ughknowledgeq
uestionscorrectlytogeta
passingsc
oreand57%ans
weredenoughbehaviorquestions
correctly
topasstha
tpartofthetest.
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Investm
entKnowledge
Investm
entKnowledge
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InvestorSurvivalSkills
GettingtheBestRateofReturn
GettingtheBestRateofReturn
Two-thirds
ofinvestors(66
%)whoinvestdirectlythroughabroker,
planneror
advisor,correctly
chosestocksas
theinvestmentin
strument
thatwould
have
offered
the
bestreturn
overthe
last2
5
years.
Fourteenpercentchosece
rtificatesofdepo
sitwhile11%thinkbonds
offerthebestreturn.Only2
%
thinkapassbooksavingsaccountwould
haveofferedthebestreturn
overthelast25years.
Menaremorelikelythanwomentochooses
tocksasthebestinvestment
(75%vs
.56%).
Respon
dentsinhousehold
swithlessthan$3
5,000inannualinc
omewere
lesslikelytopickthecorrectanswer--stock
sthanwerethosemaking
$35,000
ormore(43%vs.72%).
Respon
dentsinsinglepersonhouseholdsare
lesslikelytochos
etheright
answer
thanthoseinhouseholdswiththreeor
more(57%vs.70%
).
Respon
dentswithacolleg
edegreearemore
likelytochosesto
cksasthe
bestinv
estmentthanareth
osewithlessthan
ahighschooleducation(75%
vs.64%
).
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InvestorSurvivalSkills
GettingtheBestRateofReturn
GettingtheBestRateofReturn
66%
14%
11%
2%
7%
0%
2
0%
40%
60%
Stoc
ks
CDs
Bon
ds
SavingsAccou
nt
Don'tknow
QA4:Forthelast25years,whichoneofthefollowinginvestmentsdoyouthinkwouldha
veofferedyouthebestreturnonyourmoney:stocks,
bonds,asavingsaccountorcertificatesofdeposit?
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
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InvestorSurvivalSkills
WhatisDiversification
WhatisDiversification
Mostinves
torschosetheco
rrectdescriptionofdiversificationfromalist
of
three
choices.
Seventy-four
percent
correctly
identified
diversificationastheprocessoflowering
potentialriskoflossby
spreading
assetsacrossdifferenttypesofinvestments.
Only6%
thinkdiversificationincrease
sapersonscha
ncesofhittingthejackpot,
while4%
thinkdiversification
meansincre
asingcommissio
nsowed
fromownin
gtoomanystock
sormutualfunds
.
Menare
more
likelytha
n
women
to
cho
se
the
rightdescription
of
diversification(80%vs.68%
).
Respon
dentsinhousehold
swith$75,000orm
oreinincomeorth
osewitha
college
degree
(both
83%)are
farmore
likelyto
chosethe
correct
descriptionofdiversificationthanarethose
withlessthan$
25,000in
income
(63%)orlessthan
ahighschooleducation(36%).
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InvestorSurvivalSkills
WhatisDiversification?
WhatisDiversification?
74%
6%
4%
14%
0%
20%
40%
60%
80%
Lowersthepotential
overa
llrisk
Increasesc
hancesof
hittingj
ackpot
Pushesupcommission
paymentsbyo
wningtoo
manystocksormutual
funds
D
on'tknow
QA5:Diversificationistheprocessbywhichaninvestor.
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
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InvestorSurvivalSkills
NoNo--LoadM
utualFund
s
LoadM
utualFund
s----WhatAreThey?
WhatAreThey?
Investorsarentcertainwha
tthecorrectdefinitionofano-loa
dmutual
fundis.
Aboutfour-in-ten
(39%)correctly
identifieditas
onethat
involvesn
ocommissionorsalescharges
ofanykind.Thirty-eight
percentsa
idthisdescription
wasfalseand23%dontknow.T
hisisthe
firstknowledgequestionwherelessthan50%
gavethecorrectanswer.
Menaremorelikelythanwomentogive
thecorrectanswerforthis
question(45%vs.32%).
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InvestorSurvivalSkills
NoNo--LoadMutualFund
s
LoadM
utualFund
sWhatAreThey?
WhatAreThey?
39%
38%
23%
True
False
Don'tKnow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA6:Ano-loadmutualfu
ndinvolvesnocommissionorsaleschargesofanykind.
Isthis
statementtrueorfalse?
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InvestorSurvivalSkills
TheRelationshipB
etweenInterestRatesan
dBond
TheRelationshipB
etweenInterestRatesan
dBond
Prices
Prices
Someinve
stors(41%)correctlyunderstand
therelationship
between
interestratesandbondpric
eswellenoughtoknowthatwheninterest
ratesgou
p,bondpricesg
odown.Twenty-eightpercentincorrectly
thinkthatanincreaseininterestratesdrives
bondpricesup.
Sixteen
percentthinkthatbondpric
esremainthesamewheninterestratesgo
up.
Menaremorelikelythanwomentogive
thecorrectanswerforthis
question(48%vs.34%).
Respon
dentsaged45-54arethemostlikely
agegrouptogivethecorrect
answer
(53%).
ThoseintheWest(48%)a
remorelikelythan
respondentsinthe
Northeast
(35%)tocorrectlyidentify
theeffectofrising
interestratesonth
epriceof
bonds.
Respon
dentswithhouseh
oldincomesof$7
5,000ormorearealsothe
mostlik
elytogivethecorrectanswer(52%)
thanarethoseinh
ouseholds
withlessthat$25,000inincome(29%).
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InvestorSurvivalSkills
TheRelationshipBetw
eenInterestRatesandBond
TheRelationshipBetw
eenInterestRatesandBond
Prices
Prices
14%
28%
41%
16%
Bondpric
es
goup
Bondpric
es
godown
Bondpric
es
staythes
ame
Don'tkno
w
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA7:Wheninterestratesgoup,w
hatusuallyhappenstothepriceofbonds?Wouldyousay?
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InvestorSurvivalSkills
TheRo
leofBroker
s,PlannersandAdvisor
s
TheRo
leofBroker
s,PlannersandAdvisors
A
majorityofinvestors(
61%)correctlyunderstand
that
financial
planners,investmentadviso
rsorbrokersare
salespeoplewho
arepaid
indirectre
lationtotheamo
untandtypeofin
vestmentstheys
ell.Only
17%
think
advisorsorplan
nersarepaidba
sedonthequalityofthe
advicetheygiveand11%
thinktheyarepaidonlyiftheirclie
ntmakes
money.
Respon
dentsaged35-44arethemostlikely
agegrouptogivethecorrect
answer
(68%).
Respon
dentswithhouseh
oldincomesof$7
5,000ormorearealsothe
mostlik
elytogivethecorrectanswer(68%)
thanarethoseinh
ouseholds
with$25,000tolessthan$
35,000inincome(32%).
Thosewith
acollegede
greeare
alsomorelikelytogivethecorrect
answer
(70%)thanarethosewithahighschooldegree(44%).
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InvestorSurvivalSkills
TheRoleofBrokers,Plannersand
Advisors
TheRoleofBrokers,Plannersand
Advisors
11%
61%
17%
11%
Salespeoplewhoare
paidindirectrelationto
whattheysell
Paidindirectrelationto
thequalityofthe
ir
advice
Onlymakemone
yif
clientdoes
Don'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA8:Whichofthefollowingstatementsbestdescribesfull-servicebrokersandmostfinancialplannersorinvestmentadvisors?Mostbrokers
andfinancialplannersare...
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InvestorSurvivalSkills
WhatisaProspectus?
WhatisaProspectus?
Justoverhalfofinvestors(57%)knowthata
prospectusisananalysis
ofacompanysfinances,
productsandm
anagementthat
ismade
availablew
henthestockis
firstissued.Aboutafourth(29%)
thinkitis
aquarterly
profit/lossstatem
entsenttoallshareholders.
Menaremorelikelythanwomentogive
thecorrectanswerforthis
question(63%vs.50%).
Respon
dentsaged45-54arethemostlikely
agegrouptogivethecorrect
answer
(66%).
Thoseinhouseholdswith
onlyoneperson(6
4%)andthoseinh
ouseholds
withno
children(61%)are
morelikelytoknowwhataprospectusisthan
householdswithtwoormo
repeoplepresent(55%)orwiththepresenceof
children
(50%).
Respon
dentswithacolle
gedegree(62%)
aremorelikelyto
givethe
correctanswerthanthosewhohavegraduatedhighschool(40%).
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InvestorSurvivalSkills
WhatisaProspectus?
WhatisaProspectus?
57%
29%
14%
Ananalysisofa
company'sfinan
ces,
productsand
mangementmad
e
availableatstockissue
Quarterlyprofita
ndloss
statementsentto
all
shareholders
Don'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA9:Whatdoesthetermprospectusmean?Isit
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InvestorSurvivalSkills
InsuringIn
vestorsAgainstLossD
uetoFraud
InsuringIn
vestorsAga
instLossDuetoFraud
Mostinvestors(80%)incorrectlybelievetha
tthereissomeinstitution
outtheretoinsurethemagainstlossduetofraudintheirin
vestment
portfolio.
Forty-two
perc
entthink
theS
ecurities
andE
xchange
Commissionistheirinsurer
againlossduet
ofraudand41%
thinkthe
FederalD
epositInsurance
Corporationw
illprotectthem
in
this
instance.
Twenty-three
percentchoose
the
Securities
Investor
Protection
Corporation.Only8%
gavethe
correctresponse
whichis
thatnone
oftheseprotects
investorsagains
tfraudintheirin
vestment
portfolio.
Menaremorelikelythanwomentogive
thecorrectanswerforthis
question(11%vs.5%).
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InvestorSurvivalSkills
InsuringIn
vestorsAgainstLossD
uetoFraud
InsuringIn
vestorsAga
instLossDuetoFraud
42%
41%
23%
8%
11%
0%
20%
40%
60%
SecuritiesandExchange
Commission
FederalDepos
itInsurance
Corporation
SecuritiesInvestor
ProtectionCorporation
None
Don'tknow
QA16:Whichofthefollowingorganizationsinsuresyou
againstlosingmoneyasaresultoffraudinyourinvestmentportfolio?
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
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InvestmentBehav
ior
Invest
mentBehav
ior
March2000
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InvestorSurvivalSkills
MostInve
storsHavea
FinancialP
lan
MostInve
storsHavea
FinancialP
lan
More
than
three-fourths(77%)ofinvesto
rshaveafinan
cialplan
preparede
itherbythemselvesoraprofessio
nal.Aboutafou
rth(23%)
haveyetto
makeupafinan
cialplan.
Respon
dentsinhousehold
swith$75,000orm
oreinincomeare
somewhat
morelik
elytohaveafinan
cialplanthanarethoseinhouseholdswithless
than$25,000inincome(81
%vs.65%.)
Interestinglythereisnodifferenceforthisquestionbygende
r,age,or
presenc
eorabsenceofchildren
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InvestorSurvivalSkills
MostInve
storsHavea
FinancialP
lan
MostInvestorsHavea
FinancialP
lan
77%
23
%
1%
Yes
NoDon'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA3:Doyouhaveaspecificfinancialplanpreparedby
yourselforaprofessional?
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InvestorSurvivalSkills
Readinga
Prospectus
Readinga
Prospectus
Morethan
half(58%)haveeverreadaprospectusforamutualfundor
stock.Thirty-ninepercenth
avenot.
Menaremorelikelythanw
omentohaveeve
rreadaprospectus(68%
vs.
48%).
Incidenceofreadingapro
spectusisalsoalothigherintheSo
uth(65%)
thanintheNortheast(48%
).
Respon
dentsinhousehold
swith$75,000orm
oreinincomeare
somewhat
morelikelytohavereada
prospectusthanarethoseinhouse
holdswith
lesstha
n$25,000inincom
e(72%vs.47%.)
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35
InvestorSurvivalSkills
Readinga
Prospectus
Readinga
Prospectus
58%
39%
3%
Yes
NoDon'tk
now
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA10:Haveyoueverread
aprospectusforamutualfund
orstock?
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36
InvestorSurvivalSkills
Checking
aBrokeror
PlannersDisciplinary
CheckingaBrokerorPlannersDisciplinary
Background
Background
Onlyathird(36%)haveevercheckedthedisciplinarybackgroundof
theirbroke
rorplanner.Halfhaveneverlook
edintothis(54%
)and8%
dontuseaplannerorbroker.Thisisthefirstbehaviorquestionwhere
lessthana
majorityhavereporteddoingthecorrectthing.
ThoseintheSouth(43%)
aremuchmorelike
lytocheckintothe
irbrokers
backgro
undthanarethose
intheMidwest(26%).
Respon
dentsinhousehold
swith$75,000orm
oreinincomeare
somewhat
morelikelyto
have
che
cked
the
brokers
background
than
those
in
householdswith$25,000to
lessthan$35,000
inincome(44%vs.18%.)
Thosewhohavenotcheckedoutabroker
sdisciplinaryba
ckground
saytheytrusttheirbroker
(61%)ortheyd
ontknowhowtogetthe
information
(22%).Ninepercentsaytheirbrokerhastoldthem
thereis
noproblem
intheirbackgroundtocheckout.
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37
InvestorSurvivalSkills
Checking
theBrokersBackgroun
d
CheckingtheBrokersBackgroun
d
2%
36%
54%
8%
Yes
NoDon'tusebr
oker
Don'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA11:Haveyoucheckedoutthedisciplinarybackgroundofyourbrokerorfinancialplanner?
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38
InvestorSurvivalSkills
ReviewingInvestmentAccountStatements
Reviewing
InvestmentAccountStatements
Nearlyall
investors(90%)
reviewtheiracco
untstatementsandother
periodicre
portsabouttheir
investments.O
nly9%
donotreadsuch
statements.
Respon
dentsaged25-34
aretheleastlikelyagegroupto
readtheir
investm
entstatements(80%).
Thosewhodontreviewth
eirstatementsonaregularbasis
givethe
followinga
sreasons:noten
oughtime(38%),relyonothersto
reviewit
(20%),trustyourbrokeror
plannertokeep
ontopofthings
(14%)or
theydontunderstandthestatement(13%).
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39
InvestorSurvivalSkills
Reviewing
InvestmentAccountStatements
Reviewing
InvestmentAccountStatements
90%
9%
1%
Yes
NoDon'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA13:Doyoureviewyourmutualfundorbrokerageaccountstatementsandtheotherp
eriodicreportsaboutyourinvestments?
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40
InvestorSurvivalSkills
TakingInvestmentRisks
TakingInvestmentRisks
Most
investors
understan
d
that
riskis
essentialin
long-term
investmentstobuildanest
egg(69%).Onlyafourth(24%)
saythey
avoidrisks
becausetheycouldendupwithnothingfortheirretirement.
Menar
emorewillingtha
nwomentotake
riskinordertobuildupa
retireme
ntnestegg(73%v
s.65%).
Respon
dentsaged25-34
arethemostlikelyagegrouptoth
inkriskis
necessary,(83%)especiallycomparedtothoseage65orover(5
1%).
Thoseinhouseholdswith$
75,000inincomeo
rmorearemuchm
orewilling
totake
riskstoincreasetheirinvestmentthan
arethoseinhouse
holdswith
$25,000
tolessthan$35,000inincome(82%vs.57%).
Thosewithacollegedegreearealsomore
likelytotalerisks
withtheir
investm
entsthanthosewithonlyahighschoo
leducation(74%vs
.62%).
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41
InvestorSurvivalSkills
TakingInvestmentRisks
TakingInvestmentRisks 69
%
24%
7%
Takingrisksis
essentialtobuilda
nestegg
Youavoidtaking
risksbecauseyo
u
couldendupwi
th
nothing
Don'tknow
Base:Investorswhoinvest
directlythroughbroker,f
inancialplannerorinvestmentadviso
r,n=550.
QA15:Iwantyoutothin
kaboutriskasitrelatestoinve
stingforyourretirement.Whic
hofthefollowingstatementsbe
stdescribesyourattitu
aboutriskasitrelatestoyourretirementsavings?
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March2000
Founded1938
APPENDIX
APPENDIX
F o u n d e d 1 9 3 8
OpinionResearchCorporation
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43
InvestorSurvivalSkills
RELIAB
ILITYOFSURVEYPERCENTAGES
RELIAB
ILITYOFSU
RVEYPERCENTAGES
Resultsofanys
amplearesubjectto
samplingvariation.T
hemagnitudeofthe
variationis
measurableand
isaffectedbythenumberofinterviewsandthelevelofthep
ercentages
expressingthere
sults.
Thetablebelow
showsthepossible
samplevariationthatappliestopercentageresults
reportedherein.
Thechancesare95in100thatasurveyre
sultdoesnotvary,plusorminus,
bymorethantheindicatednumber
ofpercentagepointsfrom
theresulttha
twouldbe
obtainedifinterviewshadbeenconductedwithallpersonsintheuniverserepresentedbythe
sample.
SizeofSampleon
ApproximateSamplingTolerancesApplicable
WhichSur
veyResults
toPercentagesAtorNearTh
eseLevels
AreBased
10%or90%
20%or80%
30%or70
%
40%or60%
50
%
1,000inter
views
2%
2%
3%
3%
3%
500interviews
3%
4%
4%
4%
4%
250interviews
4%
5%
6%
6%
6%
100interviews
6%
8%
9%
10%
10
%
AdditionalSamplingTolerancesforSamp
lesof1,000Interviews
9%or91%
8%or92%
7%or93%
6%or94%
5%or95%
2%
2%
2%
1%
1%
4%or96%
3%or97%
2%or98%
1%or99%
1%
1%
1%
.2%
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44
InvestorSurvivalSkills
SAMPLINGTOLERAN
CESWHENCOMPARINGTWO
SAMPLINGTOLERAN
CESWHENCOMPARING
TWO
SAMPLES
SAMPLES
Tolerancesare
alsoinvolvedinth
ecomparisonofresultsfromindepen
dentparts
ofthesample.
Adifference,inoth
erwords,mustbeofatleastacertain
numberof
percentagepo
intstobeconside
redstatisticallysig
nificantthatisnotdueto
random
chanc
e.
Thetablebelow
isaguideto
thesamplingtole
rancesin
percentagepointsapplicabletos
uchcomparisons,
basedona95%
confidence
level.
DifferencesRequiredfo
rSignificanceAt
SizeofSam
ples
orNearThesePercentageLevels
Compared
10%or90%
20%or80%
30%or
70%
40%or60%
50%
1,000and1
,000
3%
4%
4%
4%
4%
1,000and5
00
3%
4%
5%
5%
5%
1,000and2
50
4%
6%
6%
7%
7%
1,000and1
00
6%
8%
9%
10%
10%
500and500
4%
5%
6%
6%
6%
500and250
5%
6%
7%
7%
8%
500and100
6%
9%
10%
11%
11%
250and250
5%
7%
8%
9%
9%
250and100
7%
9%
11%
11%
12%
100and100
8%
11%
13%
14%
14%
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March2000
Founded1938
Qu
estionnaire
Qu
estionnaire
F o u n d e d 1 9 3 8
OpinionResearchCorporation
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INVESTMENT 1/2 A NOVEMBER 17, 2005714468/9
1
Topline Results of Telephone Interviews With 2,063 Adult Americans
Conducted November 17-21, 2005
A1 Are you an investor, that is, do you own securities such as mutual funds, stocks, bonds, etc?(Base N=2,063 unweighted, 2,000 weighted)
46% YES -->CONTINUE
50 NO
2 DONT KNOW/UNSURE
1 REFUSED -->SKIP TO NEXT SECTION
A2 Do you invest directly or through a retirement plan? Would you say you [READ LIST.
RECORD ONE ANSWER]
(Base N=1,029 unweighted, 927 weighted, investors who own securities such as mutual funds,
stocks, bonds, etc.)
28% Invest directly yourself or through a broker or financial planner/investment advisor
37 Invest through a retirement plan
31 Or, both
2 DONT KNOW
1 REFUSED
IF INVEST DIRECTLY/THROUGH BROKER/FINANCIAL PLANNER/INVESTMENT ADVISOR,
A2 (01, 03), CONTINUE.
ALL OTHERS SKIP TO NEXT SECTION
A3 Do you have a specific FINANCIAL PLAN prepared by yourself or a professional?
(Base N=635 unweighted, 550 weighted, investors who own securities such as mutual funds, stock
or bonds and invest directly themselves or through a broker, planner or advisor)
77% YES
23 NO
1 DONT KNOW
A4 For the LAST 25 YEARS, which ONE of the following investments do you think would have
offered you the BEST RETURN on your money: stocks, bonds, a savings account, or certificates
of deposit (CDs)?
66% STOCKS
11 BONDS
2 SAVINGS ACCOUNT
14 CERTIFICATES OF DEPOSIT
7 DONT KNOW
1 REFUSED
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INVESTMENT 1/2 A NOVEMBER 17, 2005714468/9
2
A5 DIVERSIFICATION is the process by which an investor . . . [READ ENTIRE LIST BEFORE
RECORDING ONE ANSWER. ROTATE]
6% Increases his or her chances of hitting the jackpot74 Lowers the potential overall risk of loss by spreading out assets across different
companies, types of funds, and industry sectors
4 Pushes up his or her commission payments by owning too many stocks or mutual funds
14 DONT KNOW
1 REFUSED
A6 A NO-LOAD mutual fund involves no commission or sales charges of any kind. Is this
statement . . . [READ LIST. RECORD ONE ANSWER]
39% True
38 False
22 DONT KNOW
1 REFUSED
A7 When interest rates go up, what usually happens to the PRICE OF BONDS? Would you say . . .
[READ LIST. RECORD ONE ANSWER]
28% Bond prices go up
41 Bond prices go down
16 Bond prices stay the same
14 DONT KNOW
A8 Which of the following statements BEST describes FULL-SERVICE BROKERS AND MOSTFINANCIAL PLANNERS OR INVESTMENT ADVISORS? Most brokers and financial
planners . . . [READ ENTIRE LIST BEFORE RECORDING ONE ANSWER. ROTATE]
17% Are financial advisors who are paid in direct relation to the quality of the advice they offer
11 Only make money if you make money as their client
61 Are salespeople who are paid in direct relation to the amount and type of investments they
sell
10 DONT KNOW
1 REFUSED
A9 What does the term PROSPECTUS mean? Is it . . . [READ ENTIRE LIST BEFORERECORDING ONE ANSWER. ROTATE]
29% A quarterly profit and loss statement sent to all shareholders in a company
57 An analysis of a companys finances, products, and management made available when
stock is first issued
14 DONT KNOW/NEITHER
1 REFUSED
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INVESTMENT 1/2 A NOVEMBER 17, 2005714468/9
3
A10 Have you ever READ A PROSPECTUS for a mutual fund or stock?
58% YES
39 NO2 DONT KNOW
1 REFUSED
A11 Have you checked out the DISCIPLINARY BACKGROUND of your broker or financial
planner?
36% YES
54 NO
8 DONT USE BROKER/FINANCIAL PLANNER/INVESTMENT ADVISOR
2 DONT KNOW
1 REFUSED
[ASK IF NO IN A11 (02)]
A12 Why not? Would you say because . . . [READ AND ROTATE LIST. RECORD AS MANY
AS APPLY. WAIT FOR YES OR NO FOR EACH]
(Base N=333 unweighted, 295 weighted, investors who own securities such as mutual funds, stock
or bonds and invest directly themselves or through a broker, planner or advisor, and have not
checked out the disciplinary background of the broker/planner.
22% You didnt know how to get the information
61 You trust him or her
9 He or she told you there was no problem
19 DONT KNOW2 REFUSED
A13 Do you review your mutual fund or brokerage ACCOUNT STATEMENTS and the other
periodic reports about your investments?
(Base N=635 unweighted, 550 weighted, investors who own securities such as mutual funds, stock
or bonds and invest directly themselves or through a broker, planner or advisor)
90% YES
9 NO
1 DONT KNOW
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INVESTMENT 1/2 A NOVEMBER 17, 2005714468/9
4
[ASK IF NO IN A13 (02)]
A14 Why not? Which of the following comes CLOSEST to describing your situation? [READ
ENTIRE LIST BEFORE RECORDING ONE ANSWER. ROTATE]
(Base N=45 unweighted, 48 weighted, investors who own securities such as mutual funds, stockor bonds and invest directly themselves or through a broker, planner or advisor, and do not review
statements from mutual funds or brokerage accounts.
13% You dont understand them, theyre too complicated
38 You have no time, youre too busy
20 You rely on others to review
14 You trust your broker or financial planner to keep track of things
3 OTHER [SPECIFY]
9 DONT KNOW
3 REFUSED
A15 I want you to think about RISK as it relates to investing for your retirement. Which of the
following statements BEST describes your attitude about risk as it relates to your retirement
savings? [READ ENTIRE LIST BEFORE RECORDING ONE ANSWER. ROTATE]
(Base N=635 unweighted, 550 weighted, investors who own securities such as mutual funds, stock
or bonds and invest directly themselves or through a broker, planner or advisor)
24% If you take risks, you could end up with nothing for your retirement years, so you avoid
taking risks
69 Taking risks in long-term investments is essential if you are to build a retirement nest-egg
5 DONT KNOW
2 REFUSED
A16 Which of the following organizations INSURES YOU AGAINST LOSING MONEY as the
result of FRAUD in your investment portfolio? [READ AND ROTATE LIST. RECORD AS
AS MANY AS APPLY. WAIT FOR YES OR NO FOR EACH]
42% Securities and Exchange Commission
41 Federal Deposit Insurance Corporation
23 Securities Investor Protection Corporation
8 NONE OF THESE
11 DONT KNOW
1 REFUSED