Amid failure in Congress to enact a bailout plan for the financial sector, have Americans been bailing out of their stock-market holdings? So far, mostly not — though a significant number of them are thinking about it. At least, that’s what Gallup found in polling conducted in the days immediately preceding the Dow’s 778-point plunge on Monday.
Thirty-eight percent of the respondents said they personally (or jointly with a spouse) have money invested in the stock market now, whether in individual stocks, mutual funds or a self-directed 401(k) or IRA. Among these people, just 8 percent said they’ve already taken money out of the stock market due to “the problems on Wall Street in recent weeks.” Another 20 percent said they’ve “seriously considered” doing so. But the vast majority, 70 percent, said they haven’t seriously considered pulling money out of the market.
Another part of the survey asked respondents (whether stock owners or not) to pick the “best long-term investment” from a brief list of choices. A plurality, 31 percent, picked “savings accounts/CDs.” Despite the housing market’s problems, the runner-up was “real estate,” picked by 26 percent. Twenty-three percent cited “stocks/mutual funds” and 13 percent chose “bonds” as the best long-term investment.
Given the typically low rate of return on savings accounts and CDs, we can surmise that people are attracted to them on grounds of safety. But it’s not as though confidence in banks is all it might be. Asked how worried they are “about the safety of money you have deposited in banks and other financial institutions,” 16 percent of respondents said “very worried” and 29 percent “moderately worried.” Just 24 percent declared themselves “not worried at all,” while another 27 percent said they’re “not too worried.”