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Archive for Tuesday, October 15, 2002

Majority says investing in stocks bad idea

October 15, 2002

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— Almost two-thirds of Americans, including a majority of investors, say it's a bad idea to make a substantial investment in the market, says an Associated Press poll taken at a time the market has dropped to its lowest levels in years.

"When the stock market takes a beating," said New York teacher Jane Feldman, "our future takes a beating."

People were asked if they had $1,000 to spend whether they thought it would be a good idea to invest it in the stock market. The poll for the AP was conducted Oct. 4-8 by ICR/International Communications Research of Media, Pa.

The poll found that only 29 percent said it was a good idea and 64 percent said it was a bad one. Just over half of those who said they had investments in the stock market or mutual funds thought it was a bad idea.

Those numbers have moved gradually in a negative direction since April 1998, when two-thirds said in a Gallup poll that they thought it was a good idea. By early 2001, just over half of those surveyed in an AP poll said it was a bad idea.

"I really have lost quite a bit of confidence in the stock market," said Feldman, a 36-year-old substitute teacher from Rodman, N.Y. She referred to the struggling economy and corporate wrongdoing.

Some $2 trillion in value has been erased from the stock market during the past year as investors were rattled by a wave of big corporate accounting scandals. Some think confidence could take time to return.

Specialist Thomas Regan watches his screen as he works at his post
on the floor of the New York Stock Exchange. Investors traded
cautiously Monday, cashing in some gains from last week's two-day
rally.

Specialist Thomas Regan watches his screen as he works at his post on the floor of the New York Stock Exchange. Investors traded cautiously Monday, cashing in some gains from last week's two-day rally.

"Sometimes you have a quick turnaround, but this looks a lot like the late '60s," said David Wyss, chief economist for Standard and Poor. "People had a love affair with the market until the late '60s, then it took them a long time to regain confidence."

More people say interest rates and the job market affect them the most personally. Only one-fifth said the stock market affected them the most, though that number grows to one-third among those who make $75,000 a year or more.

About 42 percent of people polled said they have investments in the stock market or a mutual fund.

Those who still think investing in the stock market is a good idea are often people who consider the investment long-term.

The number who say their family's financial situation has been affected is four in 10, although only one in 10 say it was affected in a "major way," according to the poll of 1,012 adults. The poll has an error margin of plus or minus 3 percentage points.

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