Investors don't trust stocks

They think the market is unfair, survey finds, and they're moving into bonds.

By Kim Peterson Sep 14, 2010 1:49PM
Find hot stocks © Digital Vision / Getty ImagesTrading individual stocks has been a fool's errand this year. The roller-coaster market is so tough that even professional traders admit defeat.

So it's no surprise that mainstream investors have ditched stocks as well. A recent investor poll by The Associated Press and CNBC found that 61% are less confident about buying and selling stocks. And 55% said the market is unfair.

"The survey confirms that average investors have been growing more concerned about the stock market as a safe place to invest for retirement," the AP writes. Investors have responded by putting more money into bonds.

Here are more conclusions from the survey:

Don't blame computers. The wild ups and downs in the market are due more to economic uncertainty and corporate announcements than ultra-fast computerized trading, respondents said. Most of them didn't think the switch to computers was to blame.

Except if you're rich. Wealthy people were more likely to blame computers. About half of those worth $250,000 or more said computerized trading contributed to wild market swings.

The small guy loses. About 90% of small-time investors -- those with less than $50,000 in their portfolios -- said the market is unfair to them. Even wealthy investors agreed that the market is unfair to small investors.

No faith in regulators. About half of those polled said they had little or no confidence in the ability of regulators to do their job. Only 8% said their confidence is strong.

Mutual funds are hot. When given six possible investment strategies, 62% of investors said mutual funds are a good idea. But exchange-traded funds came in dead last, with about half of investors saying they have no feelings either way about them. That might show that many people still don't know what ETFs are.

Real estate is not. Investors have been burned by real estate. About 25% said that real estate is a bad investment, along with stashing money in savings accounts.

Buy-and-hold is in. Nearly 80% said the way to make money in stocks is to buy them and hold them for a long time.
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