Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

Americans Banking on Stocks, Real Estate


Americans are banking heavily on stocks and real estate in the upcoming decade, according to the Franklin Templeton Global Investor Sentiment Survey.

Twenty-nine percent expect stocks to be the best-performing asset class, the survey of 1,049 adults found. And even though the real estate market is still struggling, 26% said they expect real estate to do well in the coming decade. Most Americans, 73%, expect international stocks to offer the best opportunities. The citing of stocks and real estate was followed by previous metals (18%), non-metal commodities (14%), bonds (6%), currencies (6%) and derivatives (1%).

Investors realize that stocks are a good investment over the long term, said David McSpadden, SVP of global advisory services at Franklin Templeton Investments. "Short-term volatility has always been a part of investing in the stock market, but investors have benefited from the market's long-term upward trend," he said. "If we look closely at the market's long-term history, investors have seen positive returns in the stock market, especially following periods of weak returns. Thus, we were encouraged to see that Americans are continuing to warm up to stocks and recognize their potential."

As is often the case, men expressed greater optimism for stocks than women, with 35% of men pointing to stocks as the asset class most likely to perform the best in the coming decade, compared to 23% of women.

Franklin Templeton also surveyed an additional 12,027 people in 11 other countries and found that Americans are more bullish on stocks over a 10-year investment horizon than their global counterparts. In each of the other regions, people expect real estate to be the out-performer, with the largest percentage in Europe (33%). As for stocks, 18% of Europeans expect them to be the best-performing asset class in the coming decade.

Among Asian respondents, 30% expect real estate to be the best-performing asset class and only 20% expect stocks to outperform. In Latin America, 27% point to real estate, and 17% to stocks.

 

Dalbar has introduced a registered fiduciary designation for 401(k) advisers, the 401(k) RF Designation, for those who have obtained the skills and training to perform at that level of care. Training for the designation is provided by qualified training organizations or through a self-study program.

Plan sponsors that work with 401(k) RF Designated-advisers meet the regulatory requirements of a prudent selection of advisers. The RF Designation is authorized by the Fiduciary Standards Board. and was designed to comply with Department of Labor regulations with regards to fee disclosure, investment advice and the proposed definition of what constitutes a fiduciary.

"The new DOL regulations make it increasingly difficult for non-fiduciary advisers to provide valued services to 401(k) plans," said Louis S. Harvey, president of Dalbar. "Investment advice will soon be the exclusive domain of fiduciaries, and the RF will be the mark of distinction for fiduciaries.