Most Investors Resist Pushing the Panic Button
Only 5% Cashing Out
October 20, 2008
Despite the tremendous turbulence in the stock market, few investors are planning to sell their stocks and mutual funds or to curtail or entirely cease contributions to their 401(k), according to a poll from Ipsos/McClatchy. That said, more are paying closer attention to federally insured bank deposits, now that the guarantee has been expanded from $100,000 to $250,000.
Only 5% had sold stocks in the week of Oct. 7, and only 8% planned to sell stocks or bonds or take money out of a retirement account in the near future. Only 8% had stopped contributing to their 401(k) plan or other retirement account, and only 9% planned to stop such investments in the near future.
As far as their bank accounts are concerned, 56% said they were more confident about holdings in a bank due to the increased Federal Deposit Insurance Corp. guarantee.
The poll was conducted between Oct. 9 and Oct. 13 among 782 adult investors age 18 or older randomly selected around the nation. Ipsos considers the results of a sample of this size to be accurate within 3.6 percentage points, plus or minus, 19 times out of 20, of what they would have been had the entire adult population in the United States been polled.
If this levelheadedness continues, it will surely be welcome news for the mutual fund industry, since the Dow Jones Industrial Average tumbled to an 18% loss for the week ended Oct. 10, closing at 8451.19, 40% below its record close on Oct. 9, 2007. Fund executives have been worried how investors will react after opening up their abysmal third-quarter fund statements.
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