The public's faith in stock market investing has plunged sharply in the past few years, with two-thirds now saying it's a bad idea to make a substantial investment in the market, says an Associated Press poll taken at a time when the market has dropped to its lowest levels in years.
"When the stock market takes a beating," says New York teacher Jane Feldman, "our future takes a beating."
People were asked whether, if they had $1,000 to spend, they would consider it a good idea to invest it in the stock market.
The poll was conducted Oct. 4-8 by ICR/International Communications Research of Media, Pa. It found that only 29 percent said investing the money would be a good idea, and 64 percent said it would be a bad one.
Those numbers have moved gradually in a negative direction since April 1998, when two-thirds said in a Gallup poll that they thought it would be a good idea. By early 2001, slightly more than half 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," says Ms. Feldman, a 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 over the past year as investors were rattled by a wave of big corporate accounting scandals that weakened an already struggling economic recovery. Some think the shaken confidence could take time to recover.
"Sometimes you have a quick turnaround, but this looks a lot like the late '60s," says David Wyss, chief economist for Standard and Poor's. "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 favor investing in the stock market are often people who consider the investment long term. "It's a good idea. We have quite a bit invested," says Jamie Stevens of Leetonia, Ohio. She is a director of special education in her southeast Ohio community. "We've lost some as it's gone up and down," she adds, "but 20 years from now, I think we'll come out OK."
Three in 10 say they worry they will have to retire at a later age than previously planned because of the market's problems. Women were more likely to worry about retirement prospects than men were.
The number who say their family's financial situation has been affected is 4 in 10, although only 1 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.
Joe Harris, a businessman from Manassas, Va., says he has lost a "considerable amount of money" in the stock market, yet he wonders which stocks will be a good buy when people regain faith that the market is about to turn around.
"After getting whipped so badly, I'm just up in the air," Mr. Harris says. "We've had so many down days. "But I still believe that for the long term, some of those blue chips have to be a good investment."