Public Perceptions of Investment Methods

If you’re at all interested in investment, one of the first things you’ll learn is that there is a pretty wide gulf between common “knowledge” about investment and established fact. In reality, investors make decisions which are all over the place. Some people react in fear at the slightest headline, others stay the course for decades without reacting to the ebbs and flows of shifting investment conditions. So-called experts contradict one another frequently, and it’s truly difficult to tell the difference between good advice and pure noise. In a recent poll by Lottosend, 1500 people in the UK revealed differences in public investment wisdom. Here’s some of the things that the pollers learned.

Lots of People Don’t Trust the Stock Market. This shouldn’t come as a complete surprise. People across the world have been known to cast a wary eye at the stock market and it’s jumps and jives. The stock market has had many sharp rises and falls over the decades. In fact, if you know one thing about the stock market, that’s it. This is why a lot of people are unwilling to invest their money in it, preferring the idea of an investment they can see and touch. That’s why “Property Ownership” topped the list of people’s most trusted investments, with 33.4% of respondents picking it.

People Prefer Tax Savings. ISAs were the next most popular investment strategy, with 32.7% of people saying this was the best strategy. ISAs are similar to, but not totally equivalent to, American IRAs. IRAs are tax-protected investment accounts, but ISAs can include cash savings. ISA also aren’t a complete tax shelter for investments, though they are for cash. As cash savings isn’t truly an investment, this one only half counts, and because some people don’t even consider real estate to be a true investment (at least the way most people do it), we haven’t seen a all-out investment method yet, with more than 65% of respondents counted.

Stocks and Shares are Preferred By Surprisingly Few. Just over 11% of respondents said that stocks and shares are the best way to invest. And in a way, the people who didn’t vote for this are right. Buying up individual stocks and shares is a very risky strategy, akin to making a bed of nails out of just a few nails. That’s quite a balancing act. ETFs correct this problem, making up highly diversified stock and share investments, by taking advantage of diverse indexes and avoiding most fees associated with traditional mutual funds. But ETFs (available through Betterment investing) only received 3.4% of the vote, meaning this reliable investment strategy is still relatively unknown, even though it is Investment 101 for anyone who knows anything about investing.

The takeaway from this is that people’s investment strategies are often diverse and don’t always fit with what could be called traditional or conservative investment strategy. People will do well to spend a little time reading up on investment. A little understanding goes a long way, and investment “Seeds” planted today can pay off decades down the line.