Bloomberg Poll

[MichaelB]

A Bloomberg poll with some pretty startling results -

Among those who own stocks, bonds or mutual funds, only three of 10 people say the value of their portfolio has risen since a year ago.

I can’t believe this. The actual poll results, though, are clear. 29% said a little worse and 17% said a lot worse. How can this be?

[FONT=&quot]

For each of the following, please tell me if you sense things are generally a lot better, a little better, about the same, a little worse, or a lot worse than they were a year ago.

[/FONT]

[FONT=&quot]The value of your investments (Asked only of those with investments; n=665)[/FONT]

[FONT=&quot]A lot Better[/FONT][FONT=&quot] 6
[/FONT][FONT=&quot]A little better[/FONT][FONT=&quot] 25
[/FONT][FONT=&quot]Same[/FONT][FONT=&quot] 22
[/FONT][FONT=&quot]A little Worse[/FONT][FONT=&quot] 29
[/FONT][FONT=&quot]A lot Worse[/FONT][FONT=&quot] 17
[/FONT][FONT=&quot]Not Sure[/FONT][FONT=&quot] 1[/FONT]

The article is here Americans Say They Missed 73% Rise in S&P 500 as Economy Surged - Bloomberg.com

The poll results and methodology are here http://media.bloomberg.com/bb/avfile/rnUZ3cMJKhxI

 

[Orchidflower]

Doesn't that go along with the old saying that the fear of losing is much stronger than the possibility of gaining? No surprise to me...but maybe that's just me.

 

[Delawaredave5]

I think people are comparing current value against "high water mark" (market peak) a couple years ago - even if the survey specifically asked for one year ago.

 

[REWahoo]

I think people are comparing current value against "high water mark" (market peak) a couple years ago - even if the survey specifically asked for one year ago.

One would like to think that, but I suspect there is much truth to the poll results. A lot of people pulled their money out of the market when it crashed (sell low) and didn't get back in until a lot of the recovery had occurred (buy high) - if at all. I suspect many investors are still sitting on a lot of cash cursing the low interest rate environment.

 

[TromboneAl]

When the market was dropping, it was a top news item every day. The recovery, not so much. Perhaps that's why.

 

[billin]

If you take the value of the dollar into consideration it isn't that hard to understand. They say there isn't any inflation, but no one told my local grocer.....

 

[MichaelB]

Reports from Vanguard and Fidelity that 401Ks were either fully or much recovered, and many posts here and other financial/investing forums - like bogleheads - led me to conclude that most folks were not fully recovered but had made up a large part of the decline. The Bloomberg poll points to a much different situation. Granted, the wording is ambiguous. I find this news item quite unsettling.

 

[ziggy29]

Reports from Vanguard and Fidelity that 401Ks were either fully or much recovered, and many posts here and other financial/investing forums - like bogleheads - led me to conclude that most folks were not fully recovered but had made up a large part of the decline. The Bloomberg poll points to a much different situation. Granted, the wording is ambiguous. I find this news item quite unsettling.

I think you only "fully recovered" if you doubled down near the lows. Otherwise one can still be 20-25% off the highs. Granted that's better than 40-50% off as some could have been a year ago, but...

 

[MichaelB]

I think you only "fully recovered" if you doubled down near the lows. Otherwise one can still be 20-25% off the highs. Granted that's better than 40-50% off as some could have been a year ago, but...

So maybe I'm taking this a bit too literally - thinking 12/08, 01/09 or even 03/09, when folks responding are thinking more like Delawaredave5 - their high-water mark? Could be. The ambiguity here doesn't help and lends itself to creative interpretation (ideal for a journalist).

 

[Tesaje]

I find polls like this to only indicate how people feel emotionally about their finances. It's money. The only valid survey of actual economic status is to compare actual numbers on date x compared to date y. All they really did was ask people how do you feel?

 

[FIREd]

I find that hard to believe. A whole 46% said that their investment portfolio went down over the past year, how did they manage to do that? According to Vanguard, all asset classes are up over the past 12 months except for long term treasuries that are marginally down. The only explanation I can find is that they are down because they withdrew money from their portfolio (retirees, unemployed, etc...). Or perhaps people didn't bother to actually check their portfolio value and answered based on a gut feeling (and let's face it, most people are pretty pessimistic nowadays).

 

[ziggy29]

So maybe I'm taking this a bit too literally - thinking 12/08, 01/09 or even 03/09, when folks responding are thinking more like Delawaredave5 - their high-water mark? Could be. The ambiguity here doesn't help and lends itself to creative interpretation (ideal for a journalist).

Hard to say. But I do think that many people *feel* poorer than they did three years ago, and people's perceptions tend to drive their realities.

 

[Orchidflower]

Not just "feel poorer," but a heck of alot more afraid of sinking money into the market would be a normal reaction I should think. It makes sense to me alot of money is sitting on the sidelines now...only fools like me stayed in.

 

[Westernskies]

For a lot of folks, their "investments" includes home equity- which hasn't recovered like their 401K or other market-based investments. Perception is reality.

 

[Zathras]

I find that hard to believe. A whole 46% said that their investment portfolio went down over the past year...

Actually they didn't, they said 'the value of your investments'.
Another possibility is a year ago, the value for your money was incredible. For a small amount of money you could buy stock that made incredible gains over the next year.
Now, the stock costs more money to buy AND the gains over the next year are unknown.
So the 'value' of the stock I bought last year is much higher than the value of any stock I might buy, or hold, today.

Not sure if that is how some are seeing it, but it seems logical that those that rely more on emotion than hard numbers may feel this way.

 

[tinlizzy]

I'm stuffing my face on lunch right now and short on time but I read the article this am and I think somewhere in there it does say that the portfolios have recovered.

It is their perception or perhaps they just wait for the statements in the mail and have yet to see the recovered loss. Like FIREdreamer said, people might still be afraid to look.

 

[rescueme]

...makes sense to me alot of money is sitting on the sidelines now...only fools like me stayed in.

Well, then my DW/me are also fools, since we did the same.

At least we don't have to worry about when to get back in - we're already there ...

 

[FIREd]

Actually they didn't, they said 'the value of your investments'.
Another possibility is a year ago, the value for your money was incredible. For a small amount of money you could buy stock that made incredible gains over the next year.
Now, the stock costs more money to buy AND the gains over the next year are unknown.
So the 'value' of the stock I bought last year is much higher than the value of any stock I might buy, or hold, today.

Not sure if that is how some are seeing it, but it seems logical that those that rely more on emotion than hard numbers may feel this way.

Perhaps the people polled are more sophisticated investors than I am because when I read the question in its context, this interpretation of "the value of your investments" would never even cross my mind.

 

[Zathras]

Perhaps the people polled are more sophisticated investors than I am because when I read the question in its context, this interpretation of "the value of your investments" would never even cross my mind.

I think you have it backwards, perhaps the people polled are LESS sophisticated investors than you

That interpretation is a far more emotional one, and therefore more dangerous one (imho). It is the same type of emotional interpretation that led some investors to get 'all out' while they 'still could' last march

 

[FIREd]

OK, now I get what you mean...

 

[LOL!]

If the poll had asked:

1) What were your investments worth in March 2009?
a) I don't know
b) $0 to $50,000
c) $50,001 to $100,000
d) $100,001 to $250,000
e) $250,001 and up
f) None of your business

I believe most people would have answered (a) & (f). Then if asked:

2) What are your investments worth today in March 2010?
...

Then
3) How much more are your investments in question 2 than in question 1?

Then one might see different answers. However, with unemployment at 10%, at least 10% of the answers should be that now they have a lower value because presumably if unemployed they would be spending their savings. Furthermore, many retirees invest in only CDs and savings accounts, so with low interest rates, they may also be at a lower value.

 

[chinaco]

I am not surprised. Many people I know made bad investment mistakes. The most common was they pulled their money out along the way down (but late in the cycle after 20% to 25% losses or more). Some are still on the sidelines waiting out the big crash that is coming. Others are trying to time the market.

When the crash occurred, we were allocated a little heavy in stock compared to where we wanted to be for my planned ER date (a couple of years off at the time). The market drop brought that in line . We held our positions in stocks and bonds since the crash. I have invested more money in the stock market using 401k contributions.... but holding onto our bond allocations to ensure I am on target for ER .

Our portfolio is off about %15 from our high watermark (before the crash).

My Mid Cap and Small Caps are still off the high, but doing fairly well! Historically it seems that small caps do well early in the recovery.

 

[Gone4Good]

I think people are comparing current value against "high water mark" (market peak) a couple years ago - even if the survey specifically asked for one year ago.

Has to be. Nearly anything you owned one year ago is worth more today. It doesn't seem possible for 70% of the population to have lost money in their portfolio when almost everything is higher.

Then again, last year we had a poster (forget who) that was strongly advocating putting everything in 30 year treasury bonds . . . maybe 7 out of 10 people followed his advice.

 

[Danmar]

Our (DW and I) portfolios' hit an all time high yesterday. Surveys are often ambiguous and hard to interpret. In any event we should count ourselves very lucky.

 

[Alan]

Has to be. Nearly anything you owned one year ago is worth more today. It doesn't seem possible for 70% of the population to have lost money in their portfolio when almost everything is higher.

Then again, last year we had a poster (forget who) that was strongly advocating putting everything in 30 year treasury bonds . . . maybe 7 out of 10 people followed his advice.

A year ago I was amazed (again!) at how many folks at work had responded to the financial crisis by putting all their 401(k) money in the stable value fund.