An AP-CNBC poll released Tuesday shows 61% of investors wary of individual stocks due to recent market volatility, but 62% point to mutual funds as a good or somewhat good investment vehicle. That had mutual funds beating out bank savings accounts, cited by 51%, and both bonds and real estate, which each scored 50% of investors’ backing. Exchange-traded funds received a thumbs-up by only 26% of the 1,035 respondents.
Approval for mutual funds increases among those earning $100,000 or more a year. About 75% in this income range rate mutual funds as good investments.
Eighty-six percent said the market is unfair to small investors but favorable to investment banks, hedge funds and professional traders. Despite the historic regulatory reform bill, 50% have little or no confidence in the ability of regulators to even the playing field for investors. Only 8% have a great deal of respect for regulators.
Nonetheless, despite this skepticism, 48% overall still believe individual stocks are still a somewhat good or very good way to make money, and 78% say the best way to make money on equities is buy and hold.
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The views changed considerably among wealthy investors with more to lose, however. Among those with $250,000 or more invested, more than half blame computerized trading for the big swings. For those with $50,000 or more invested, the skepticism toward computerized trading resides among only about one-third.
Sixty percent of those polled between Aug. 26 and Sept. 8 said they have been paying closer attention to stock market swings since the May 6 Flash Crash.
