AP-CNBC POLL EXAMINES THE STATE OF INVESTOR CONFIDENCE
FINDINGS SHOW MANY INVESTORS STILL BELIEVE THEY CAN MAKE MONEY IN THE STOCK MARKET THOUGH HALF HAVE LITTLE FAITH IN REGULATORS AND A MAJORITY DO NOT BELIEVE THE MARKET IS FAIR TO ALL
ENGLEWOOD CLIFFS, N.J., September 14, 2010 – In the face of continued economic uncertainty, a new AP-CNBC poll finds that investor confidence has been shaken, but most still believe that there are good returns to be made in the stock market. Key findings include:
Nearly half of investors (48%) believe good profits are available in the stock market for those who conduct smart research, with men (55%) likelier than women (42%) to say research can produce good returns.
Most surveyed (61%) say the market’s recent swings have made them less confident about buying individual stocks. This belief is shared equally by people of various incomes and portfolios.
Half (50%) have little or no confidence that stock market regulators are doing a good job. People with assets of $250,000 or more (14%) were likelier to have confidence than those worth under $50,000.
Only 13% surveyed think the market is fair for small investors, while nearly 9 out of every 10 think it's perfectly fair for investment banks, hedge funds and professional traders.
“More than two years after the financial crisis, it's clear that a grinding recession, global volatility and the so-called flash crash have taken a toll on investor attitudes but also created pockets of opportunity,” said Nikhil Deogun, Managing Editor, CNBC Business News. "CNBC's reporting and analysis shows that the rise of high-frequency trading has lowered trading costs and brought liquidity into the market but has also unnerved investors, with only 8% believing regulators have a firm grasp on Wall Street.”
The announcement of the AP-CNBC poll results coincides with the debut of a new CNBC series, Man vs. Machine. Airing Tuesday, September 14-Thursday, September 17 on Squawk on the Street (9-11 am ET) and Closing Bell (3-5 pm ET), Man vs. Machine examines with in-depth reports from Herb Greenberg, Bob Pisani,Mary Thompson and Scott Wapner the impact that technology is having on Wall Street and investing.
Investors are split over the impact of computerized trading on the market, but only 28% consider it bad. Those with assets of $250,000 (53%) are likelier than those worth under $50,000 (34%) to blame computers for recent volatility in the markets.
When it comes to the market’s recent dramatic swings, 79% assign a great deal or a lot of responsibility to general economic uncertainty. Half of investors (50%) believe news about particular companies are to blame, while 38% fault automatic trades conducted by computers.
Asked to rate six investment options, mutual funds were the favorite, with 62% calling them a good investment. Exchange traded funds finished at the bottom. About three quarters, or 74%, of those earning at least $100,000 annually rated mutual funds as good investments, compared to 55% of those making under $50,000. As for individual stocks, people with assets of $250,000 or more (61%) like them more than do those worth under $50,000 (47%).
Nearly 8 in 10, or 78% of those surveyed, say the best way to make money in the market is to leave it there for a long time.
Full Poll results and additional Man vs. Machine reporting is available on CNBC.com.
The Associated Press-CNBC Investors Survey was conducted by Knowledge Networks from August 26 to September 8 and involved online interviews with 1,035 randomly chosen adults who own stocks, bonds or mutual funds. Participants without Internet access were provided it for free. The margin of sampling error is plus or minus 3.9 percentage points.
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