The Downside of an ‘Ownership Society’

The advent of the “ownership society” must seem like an awfully mixed blessing to the owners of stocks that have tanked during the current recession. An Associated Press-GfK Poll fielded last month found that plenty of people are very worried about the value of their investments, as well they might be. Forty-eight percent said they worry “a lot” about “seeing the value of your stocks and retirement investments drop.” Another 21 percent said they worry “some” about this. Seven percent said they worry “not much” and 12 percent “not at all,” with the rest saying the question doesn’t apply to them.

Such anxiety has become as widespread as worries that, a generation ago, would likely have been far more common. Compared to the number of people fretting about their investments, fewer respondents said they worried a lot about “being unable to pay your bills” (38 percent, with another 26 percent worried “some”), about “losing your job” (28 percent “a lot,” 19 percent “some) or about “being unable to keep up with your mortgage and credit-card payments” (32 percent “a lot,” 22 percent “some”). Even the fear of facing “major unexpected medical expenses” (38 percent “a lot,” 26 percent “some”) was a bit less common among respondents than worry about stocks and other investments.

So, with all of this worrying, have shareholders done anything to alter their investment portfolios? Not much. Asked how often in the past 12 months they’ve made changes in their investments (“buying or selling stocks or mutual funds either within or outside an employer-sponsored 401(k) plan”), 19 percent said they’d done so at least four times — including a frenetic 4 percent who’d made changes 25 times or more. Four percent said they’d made changes three times, 11 percent two times and 16 percent one time.

Amid the most volatile stock market in living memory, though, 48 percent of shareholders said they’ve made a grand total of zero changes in their holdings during the past 12 months. You’d never guess this from the tenor of much financial-service advertising, with its emphasis on highly active management of one’s account.