DECEMBER 31, 2001
WHERE TO INVEST -- STRATEGIES FOR STOCKS & BONDS
BEST INVESTMENT
If you had to choose the one investment that you think would be the best
to make right now, which would it be?
1989 1998 1999 2000 2001
Real estate 40% 30% 30% 28% 39%
Mutual funds 8% 18% 20% 21% 13%
Bank or S&L deposits 8% 11% 12% 14% 7%
Common stock 5% 13% 13% 8% 7%
Money-market funds 11% 7% 7% 8% 5%
Gold, other
precious metals 8% 4% 5% 4% 5%
Government bonds 15% 5% 5% 5% 8%
Corporate bonds 3% 3% 2% 1% 3%
Don't save/Not sure/
No answer 2% 9% 5% 10% 13%
WHERE'S YOUR MONEY?
Thinking about your household's total assets including real estate, stocks
(including stock mutual funds), bonds (including bond mutual funds), savings
instruments, and cash, does your household own any of the following?
YES NO NOT SURE/
NO ANSWER
Real estate 2000 59% 32% 9%
2001 60% 37% 3%
Stocks 2000 47% 42% 11%
2001 47% 49% 3%
Bonds 2000 27% 61% 13%
2001 26% 69% 4%
Savings instruments
and cash 2000 67% 21% 12%
2001 72% 25% 2%
Some other asset 2000 34% 55% 12%
2001 34% 62% 5%
BULLS OR BEARS?
Over the next year, do you think stocks will go up, stay about the same, or
go down?
1989 1998 1999 2000 2001
Go up 39% 37% 52% 33% 52%
Stay about the same 38% 34% 20% 26% 25%
Go down 16% 21% 17% 23% 14%
Not sure/No answer 7% 8% 10% 18% 10%
IS A CRASH COMING?
Over the next 12 months, how would you rate the chance of another big crash
in the stock market--very likely, somewhat likely, not very likely, or not
at all likely?
1989 1998 1999 2000 2001
Very likely 13% 14% 15% 13% 14%
Somewhat likely 43% 41% 37% 37% 38%
Not very likely 31% 29% 33% 35% 32%
Not likely at all 10% 11% 11% 7% 11%
Not sure/No answer 3% 4% 4% 8% 5%
THE WAR ON TERRORISM
How do you think terrorism and the war against it will affect the stock
market over the next 12 months--very positively, somewhat positively,
somewhat negatively, very negatively, or will it have no effect at all?
Very positively 11% Very negatively 8%
Somewhat positively 28% No effect at all 14%
Somewhat negatively 32% Not sure/No answer 7%
(Remaining questions asked only of stock investors)
BOUGHT STOCKS LATELY?
Have you bought common stock or shares in a stock mutual fund within the
past year?
1999 2000 2001
Have bought 57% 59% 53%
Have not bought 42% 39% 46%
Not sure/No answer 1% 2% 1%
STOCK-BUYING PLANS
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 stocks or stock mutual funds
somewhat, or reduce your investments a lot?
1999 2000 2001
Invest a lot more 10% 7% 4%
Invest somewhat more 37% 35% 24%
Reduce somewhat 10% 13% 15%
Reduce a lot 5% 5% 9%
Stay the same 29% 32% 42%
Don't invest/Not sure/No answer 10% 7% 6%
WHAT CAN YOU EXPECT FROM STOCKS?
In the long run, what sort of total returns (capital gains plus dividends)
do you expect the stock market to produce for you--below 5% a year, 5% to
below 10% a year, 10% to below 12% a year, 12% to below 15% a year, or 15%
or higher a year?
1997 1998 1999 2000 2001
Below 5% a year 4% 9% 7% 7% 12%
5% to below 10% a year 27% 26% 30% 33% 42%
10% to below 12% a year 30% 29% 27% 25% 24%
12% to below 15% a year 19% 18% 14% 12% 9%
15% or higher a year 14% 17% 13% 12% 7%
Not sure/No answer 5% 2% 10% 11% 7%
THINK YOU CAN BEAT THE MARKET?
How confident are you that the stocks or mutual funds you pick will beat
the market averages---very confident, somewhat confident, not very confident,
or not at all confident?
2000 2001
Very confident 17% 14%
Somewhat confident 62% 62%
Not very confident 12% 14%
Not at all confident 3% 5%
Not sure/No answer 6% 4%
VALUATION OF STOCKS OVERALL
Overall, how would you describe the stock market's valuation--very over-
priced, somewhat overpriced, fairly valued, somewhat cheap, or very cheap?
1999 2000 2001
Very overpriced 12% 11% 4%
Somewhat overpriced 46% 40% 29%
Fairly valued 31% 28% 39%
Somewhat cheap 4% 9% 17%
Very cheap * 1% 3%
Not sure/No answer 7% 11% 8%
VALUATION OF INTERNATIONAL STOCKS
Overall, how would you describe the valuation of international stocks--very
overpriced, somewhat overpriced, fairly valued, somewhat cheap, or very
cheap?
1999 2000 2001
Very overpriced 6% 7% 5%
Somewhat overpriced 22% 23% 18%
Fairly valued 19% 17% 21%
Somewhat cheap 11% 10% 8%
Very cheap 1% 2% 2%
Not sure/No answer 41% 41% 47%
VALUATION OF TECHNOLOGY STOCKS
Overall, how would you describe the valuation of technology stocks--very
overpriced, somewhat overpriced, fairly valued, somewhat cheap, or very
cheap?
2000 2001
Very overpriced 18% 15%
Somewhat overpriced 35% 31%
Fairly valued 19% 22%
Somewhat cheap 6% 17%
Very cheap 1% 4%
Not sure/No answer 21% 11%
VOLATILITY
Do you believe that next year, the stock market will be less volatile, about
as volatile as this year, or more volatile?
1998 1999 2000 2001
Less volatile 16% 11% 24% 42%
About as volatile as this year 56% 54% 43% 40%
More volatile 26% 28% 24% 12%
Not sure/No answer 2% 7% 10% 6%
This survey of 1,006 adults, including 565 stock investors, was conducted
from Nov. 30 to Dec. 3, 2001, for BusinessWeek by Harris Interactive Inc.
The margin of error for stock investor responses is plus or minus 4%.
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
