Nearly half of Americans regret not investing more in stocks in the last 10 years. That's despite the fact that various stock indexes declined by 15% to 20% in 2022, according to a recent survey.
Overall, 45.1% of Americans overall, including both investors and non-investors, said they regretted not taking full advantage of the stock market, a November MagnifyMoney survey of over 1,500 U.S. resident adults reveals.
The result differs by age. Gen Zers are more likely to say like they've missed out when compared to other age groups. That makes sense, since younger investors have had less time to build wealth with their investments. Here's the breakdown:
- Gen Z (ages 18 to 25): 60%
- Millennials (26 to 41): 51%
- Gen X (42 to 56): 46%
- Baby boomers (57 to 76): 27%
Of those with regrets, just over half of the respondents say they're changing their approach to investing. This included putting more money into stocks, consulting with a financial advisor and paying more attention to the stock market.
Index funds are an easy, low-risk way to invest in stocks
If you're thinking of investing more money into stocks but don't know where to begin, consider a stock index fund, which is like a basket of publicly traded stocks. This can include an S&P 500 index fund, which tracks the 500 biggest companies traded on U.S. stock exchanges.
Another example would be an index fund that tracks tech-heavy stocks listed on the Nasdaq stock exchange.
The advantage with index funds is that you're putting your money on a sector or the economy as a whole, rather than picking individual winners. Historically, this approach has proven to be a good long-term investment.
From S&P 500's inception in 1928 till 2021, the S&P 500 has had annualized returns of 11.82%.
That includes years-long rough patches when the stock market shrank by 10% or more each year, which is a good reminder that stocks are never an entirely risk-free investment, especially in the short term. Nevertheless, making regular contribution into an index fund until retirement is commonly seen as an effective, low-risk way to build wealth over time.
For more information about investing in index funds, CNBC Select has you covered.
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