In a survey report released earlier this month by Bankrate.com RATE, researchers found that over half of Americans are not invested in the stock market.
While at face value, the results that 52 percent of polled Americans pass over the market, this statistic reveals something unique about current financial sentiments.
Claes Bell, banking analyst for Bankrate.com stated, "It was a little surprising, especially since we specified [in the survey] that also includes IRAs and 401(k)s."
Bell speculates that the results are due in large part to "mistrust of the markets" and lack of funds to invest in the first place.
Supporting this supposition, 53 percent of the survey participants who said they were not invested in stocks cited the latter as their reasoning for opting out.
Results Rundown
- 53 Percent: Avoidance because of lack of money.
- 21 Percent: Avoidance because of too little understanding.
- 9 Percent: Avoidance because of distrust.
- 7 Percent: Avoidance because of risk.
Results pertaining to millennials (adults under the age of 30) were also highlighted and discussed in depth.
- 74 Percent: No stock investments.
- 38 Percent: No knowledge base. Millennials were two times as likely to cite lack of understanding as why they avoided the market than other age brackets.
- 42 Percent: No money to invest. Millennials as a generation have been bombarded with financial difficulties not seen in over half a century; from the Great Recession to the astronomical student loan debt to unemployment/underemployment, adults under the age of 30 are sometimes quite literally unable to invest substantially.
Why It Matters
Besides the implications of negative sentiments revolving around the stock market, these results could also foreshadow a generation of financial regret.
According to the Bankrate.com report, stocks have "historically been one of the highest-returning types of securities available to individual investors" and the widespread lack of investing into this security "is likely to have some harsh consequences for Americans over the long term."
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