Are Investors Really All That Bearish?

Gallup released a very interesting survey on Monday discussing individual’s “awareness” of the recent “bull markets” strong gains. From Gallup:

“…the survey shows that while the majority of investors (64%) do know that stocks increased on average in 2013, barely a quarter (24%) believe they increased by 20% or better, and only 7% are aware that the average increase was in the 30% range. The largest proportion — 37% — believe stocks increased by 10%, while another 21% think stocks were flat and 9% think they decreased.”

I found this interesting. For those of us involved in the financial markets every day, we assume that everybody else is just as informed as we are. The reality is that most don’t.

First, the survey, as you would expect was directed only at individuals that have assets invested in the markets:

“The survey is based on a nationally representative sample of U.S. investors with $10,000 or more in stocks, bonds, mutual funds, or in a self-directed IRA or 401(k).”

However, this has to be put into some context, and there are several things that we already know about the average American.

1) Financial education extremely lacks even though money is a crucially important aspect of family lives. (Yes, “love” is extremely important, however, money ranks in the top 3 reasons for divorce.)

2) For most, money invested in the markets is primarily through company sponsored plans. Individuals mostly under-save in these tax-advantaged plans, only the minimum, and is often forgotten about.

3) They are more interested in watching “entertainment” according to recent Nielson survey’s which shows that the average American, over the age of 2, spends 34 hours per week watching live television and 3-6 more hours watching taped programs. The top 5 networks watched are all entertainment related for 18-49-year-olds with only Fox News hitting in the top 5 for all ages. When it comes to financial news, less than 1% watched a network like CNBC.

In other words, financial education and “interest in money” rank very low on the list of priorities.