Plan sponsors continue to expand the number of investment options available through their retirement plans, but a new study shows that too much choice adversely affects plan participation.
Investors Optimistic About Market in the Long Term:But Survey Shows 20% Decline in Equity Fund Ownership From 2001
A recently released survey is showing the large majority of U.S. investors as being optimistic about the stock markets long-term investment opportunities.
The Investor Outlook Survey, taken by Harris Interactive for AllianceBernstein Investment Research and Capital, shows that investors have pulled back, but not out of the market. Of the 3,295 adults polled online throughout the nation between March 14 and March 18, 64% said they have investments, 6% fewer than 68% in the survey in 2001.
The survey also showed a 20% decline in ownership of U.S. stock mutual funds, with 31% saying they own such funds, compared with 39% in 2001.
The study also found that 43% of investors expect short-term growth and nearly eight out of every 10 polled believe that the stock market offers good long-term investment opportunities.
However, the survey also found that despite these strong long-term growth sentiments, "nearly six out of 10 of self-directed or inexperienced investors are not taking practical steps to manage their portfolios in line with market expectations." The more experienced investor was much more likely (86%) to have taken at least one step to align their portfolios with market expectations.
Not surprisingly, the study also found that advised investors are more than three times as likely (41%) as the general public (12%) to invest in international stock mutual funds.
According to Richard A. Davies, head of fund marketing for AllianceBernstein, "An overwhelming percentage of investors overall are not taking advantages of the added benefits of diversification in their portfolios, be it ownership of international stock mutual funds or asset allocation. However, the survey indicates that investors innately feel they should be doing more."