BW/HARRIS POLL:
INVESTORS ARE UNFLAPPABLE
What will it take to get investors really rattled?
Something more, it seems, than what they saw in 1998.
Even after weathering an abrupt correction and some
uncomfortable bumps since, Americans find stocks
compelling -- and more of them than ever are joining
the party. Investors think the market is overvalued
(Internet stocks, intriguingly, less so), and they
expect greater volatility to come. Yet most are
comfortable taking on risk to get a shot at the
rewards: Two-thirds look for long-term returns of
10% a year or higher.
Note: This is an extended, online-only version of the
BW/Harris Poll that appeared in the Dec. 28, 1998 issue
of Business Week.
TO MARKET, TO MARKET
If you had to choose the one investment that you think
would be the best to make right now, which would it be?
Dec. June
1998 1998 1997 1996 1989
Real estate 30% 30% 33% 25% 40%
Mutual funds 18% 24% 21% 24% 8%
Common stock 13% 15% 11% 10% 5%
Bank or S&L deposits 11% 9% 10% 8% 8%
Money-market funds 7% 8% 5% 6% 11%
Government bonds 5% 5% 5% 9% 15%
Gold or other
precious metals 4% 4% 4% 7% 8%
Corporate bonds 3% 3% 4% 2% 3%
I don't save or
invest at all 3% 1% 2% 3% NA%
Not sure 6% 3% 5% 6% 2%
HOME, WHERE THE ASSETS ARE
What percentage of your household's total assets does each
of the following account for? (Results total less than 100%)
Dec. June
1998 1998 1997
Real estate 41% 41% 40%
Savings instruments
and cash 25% 23% 29%
Stocks 11% 11% 10%
Bonds 4% 4% 4%
Other 13% 10% 9%
MIXED RECEPTION
Over the next six months, do you think you will probably
invest a lot more in stocks or stock mutual funds, invest
somewhat more in stocks or stock mutual funds, reduce your
investment in stock or stock mutual funds somewhat, or
reduce your investments a lot?
Dec. June
1998 1998 1997 1996
Invest a lot more 5% 7% 5% 5%
Invest somewhat more 22% 22% 22% 22%
Reduce somewhat 9% 8% 10% 12%
Reduce a lot 13% 10% 13% 18%
Stay the same 28% 25% 22% 21%
I don't save or invest 20% 23% 21% 20%
Don't know/Not sure 3% 5% 7% 2%
STEADY AS SHE GOES
Over the next year, do you think stocks will go up, stay
about the same, or go down?
Dec. June
1998 1998 1997 1996 1989
Go up 37% 35% 38% 39% 36%
Stay about the same 34% 40% 39% 36% 38%
Go down 21% 17% 16% 19% 18%
Don't know/Not sure 8% 8% 7% 6% 8%
BRACE YOURSELF?
Over the next 12 months, how would you rate the chance of
another big crash in the stock market?
Dec. June
1998 1998 1997 1996 1989
Very likely 14% 12% 14% 12% 12%
Somewhat likely 41% 32% 43% 35% 28%
Not very likely 29% 38% 30% 35% 40%
Not likely at all 11% 14% 9% 15% 17%
Don't know/Not sure 4% 4% 4 3% 3%
STOCKING UP
Have you bought common stocks or shares in a stock mutual
fund within the past year, or not?
Dec. June
1998 1998 1997 1996 1989
Have bought 28% 26% 24% 21% 15%
Have not bought 70% 73% 75% 78% 84%
Not sure 2% 1% 1% 1% 1%
REMAINING QUESTIONS ASKED ONLY OF STOCK INVESTORS
CONQUERING FEAR
Which statement best describes your attitude toward investing?
I'm not willing to risk my retirement savings in the stock
market. I invest mainly in highly predictable, risk-free
assets such as Treasury bonds, money market funds: 18%
I'm willing to accept a certain amount of risk and give up
some predictability in order to achieve the higher returns
that the stock market historically has produced: 57%
I view the stock market over the long term as reasonably
predictable and not very risky, and so have invested most
of my retirement assets there: 24%
I don't invest or save at all: 1%
STOCKS' REWARDS
In the long run, what sort of total returns (capital
gains plus dividends) do you expect the stock market
to produce for you?
Dec. June
1998 1998 1997 1996
Below 5% a year 9% 1% 4% 8%
5% to below 10% a year 26% 27% 27% 36%
10% to below 12% a year 29% 34% 29% 29%
12% to below 15% a year 18% 22% 21% 13%
15% or higher a year 17% 14% 14% 9%
Don't know 1% 2% 5% 5%
OVER THE TOP
Overall, how would you describe the stock market's valuation?
Dec. June
1998 1998 1997
Very overvalued 10% 11% 10%
Somewhat overvalued 51% 49% 52%
Fairly valued 29% 29% 27%
Somewhat undervalued 6% 8% 6%
Very undervalued 2% 1% 2%
Don't know 2% 3% 3%
DON'T BUDGE
How did you respond when stocks plunged this past summer?
1998 1997*
Bought stock 11% 6%
Sold all stock 1% 0%
Sold some stock 3% 2%
Switched money into bonds 3% 1%
Didn't change holdings 80% 90%
Not sure 2% 1%
FOREIGN PERILS
Overall, how would you describe the valuation of international
stocks -- very overvalued, somewhat overvalued, fairly valued,
somewhat undervalued, or very undervalued?
Very overvalued 10%
Somewhat overvalued 27%
Fairly valued 20%
Somewhat undervalued 19%
Very undervalued 4%
Don't know 20%
THE LOFTY NET
Overall, how would you describe the valuation of Internet
stocks -- very overvalued, somewhat overvalued, fairly valued,
somewhat undervalued, or very undervalued?
Very overvalued 24%
Somewhat overvalued 24%
Fairly valued 26%
Somewhat undervalued 7%
Very undervalued 3%
Don't know 16%
FUTURE IMPERFECT
Compared to this past year, do you believe that next year
the stock market will be -- less volatile, about as volatile
as this year, or more volatile?
Less volatile 16%
About as volatile as this year 56%
More volatile 26%
Don't know 2%
BROKERS' RIVALS
In general, from whom do you buy and sell stocks?
A full-service, full-price broker 38%
A discount broker 24%
Directly from the company 24%
My employer 11%
Other (SPECIFY) 6%
MAKE THE CALL
In general, how do you buy and sell stocks?
By phone 51%
On the Internet 11%
In person 26%
Through my employer 13%
By mail 2%
Other 5%
Don't know 1%
*1997 question referred specifically to events in Asia.
Survey of 1,005 adults, including 343 stock investors,
conducted Dec. 9-13, 1998 for Business Week by Louis
Harris & Associates Inc.
EDITED BY KEITH H. HAMMONDS
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