Potential Investment Mistakes Scare 69% of Americans

BY Rachel Cagle
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According to a new survey from Ally Invest, the online trading and automated investing arm of Ally Financial Inc., nearly two-​thirds of survey respondents (65%) say they find investing in the stock market to be scary and/​or intimidating, up from 61% in a similar survey during the same period last year. Fear is highest among Gen Z and millennial consumers: 69% for those ages 18–23 and 66% for those ages 24–37.

Most U.S. adults (69%) say when it comes to investing, they worry whether they are doing the right thing. Again, worry levels have increased from last year when less than two-​thirds (63%) felt this way. In addition to these concerns around investing, most survey respondents say they'll be relying on Social Security in their retirement but have doubts the benefit will still be available to those currently 50 years old and younger.

"The survey results point to a serious dilemma: most Americans don't see Social Security as a long-​term solution, yet many are still banking on it for their retirement, so something's going to have to give," said Rich Hagen, president of Ally Invest. "People can no longer afford to sit by and hope there will be a safety net to support them or that they will be healthy enough to continue earning an income well into their senior years. Everyone, particularly young adults, needs to adopt a proactive mindset and have a plan."

What are respondents scared of?

  • Making a wrong call: Over half of those polled (52%) are scared of the thought of making a bad investment and losing money. Of the survey respondents, 72% of women, 65% of men and more than 70% those classified as Gen Z or millennials have this fear.
  • Trusting the wrong source: One-​third (34%) of respondents are scared of not knowing whom to trust for advice.
  • Lacking the funds: One-​third (33%) find the amount of money required to invest scary.
  • Knowing where to start: Over one-​quarter (27%) are scared about not knowing how to get started.
  • Having the time: 19% are scared about the time it takes to invest properly.
  • Timing it wrong: 17% are scared the market has passed them by and is going to go down.
  • Nothing: Only 15% say they're not scared of anything when it comes to investing.

It may be because of fears like these that 60.4% of Investment Planning Seekers have used a search engine to research a product or service they were considering for purchase, according to AudienceSCAN. They probably used Google, the preferred search engine of 90.8% of this consumer group, but make sure your SEO is current because only 21.4% of this audience will go past the first page of search results. About 25% of this group has taken action after seeing information on social media that wasn't even an advertisement. They're also 40% more likely than other adults to find advertising on social networks useful to them.

"The good news for consumers is there are many more affordable and accessible options for investing today that can take the anxiety out of the process," added Hagen. "When we survey our customers at Ally Invest, 70% say online investing has helped them improve their financial position, 81% say it has made the process less intimidating, and 89% say it's made it easier to manage their investments. So there is light at the end of the tunnel for those who look for it and act proactively."

What sources are people currently planning to rely on for retirement?

  • Social Security: Three in five (59%)
  • Savings: Over two in five (45%)
  • 401(k): One-​third (33%)
  • Pension: Nearly one-​quarter (23%)
  • Investments in stocks and bonds: Nearly one-​quarter (23%)
  • IRA: One in five (21%)
  • Real Estate/​Home Sale: One in ten (11%)
  • Nothing: One in ten (11%) say they will rely on none of these because they are not planning to retire.

While Social Security is the source of income on which most Americans are counting for retirement, three in five (59%) also express belief that when people who are under 50 retire, social security will most likely not be paying money to retirees any longer.

Financial advisors can reach out to worried Investment Planning Seekers a number of ways. For starters, 66.8% of this audience took action last year after seeing a commercial on TV, according to AudienceSCAN. In that same amount of time, 54.3% took action after receiving an email ad and 53.2% reacted to ads they saw on daily deals sites such as Groupon. They're also 24% more likely than other adults to be motivated to action by text ads they received or advertisements on their mobile smartphone apps.

AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.