The ghosts of 2008-09 hang over older investors, many of whom saw large portions of their wealth wiped out in very little time.
With that distaste still lingering, many Americans continue to shun stocks despite the bull-market recovery and the growing wealth such investing is bringing to millions of American households.
A little over half of those recently surveyed said they don’t invest in the market, according to a new Bankrate report, which polled 1,001 people around the nation.
“Of those who responded that they do not invest in the market, 53 percent say the reason is due to lack of money,” according to the survey.
Others factors keeping people from investing include not knowing enough (21 percent), a lack of trust in brokers and advisers (9 percent) and viewing the stock market as too risky (7 percent), along with the fear of high fees (2 percent).
“The numbers are surprising,” says Claes Bell, a banking analyst with Bankrate. “The survey shows there’s a great need for education.”
Older Americans were the most likely to be wary of stocks. Those ages 50 to 64 said “they don’t invest because they don’t trust stockbrokers or advisers,” the survey said.
Seniors over 65 said they don’t invest “because stocks are too risky.”
Some of the elderly who lived through multiple crashes may still be spooked by stocks, Bell explains. But even elderly investors, who will probably live longer than their parents, will likely need some growth component such as stocks in their retirement funds, he says.
Lewis Altfest, a Manhattan adviser, says ignoring stocks is a mistake.
“As Warren Buffett would say, stocks are the most logical choice over the long term.”
Altfest also says investing is critical over the long term in retaining buying power. That, he adds, means money grows at a faster pace than inflation and taxes.
For that, Altfest recommends “stocks and real estate.”