Market highs are pulling investors off the sidelines. Who’s most likely to get into the stock market game?
Investors are coming off the sidelines and getting back into the stock market game, according to the latest monthly survey from Spectrem’s Millionaire Corner. Who’s most likely to invest in stocks over the next 12 months?
Roughly 44 percent of the more than 1,200 investors surveyed in February indicate they’ll invest in individual stocks over the next year. That’s up from the 35 percent who said they’d play the stock market game in our August survey. Interest is stocks is up overall, but varies significantly by wealth level, age, risk tolerance and other demographic factors. Here are some Millionaire Corner insights into the biggest stock market players:
· Investors Who Think They’re Smart: More than 64 percent of investors who describe themselves as very knowledgeable about investments plans to invest in individual stocks over the next 12 months. This contrasts sharply with investors who profess little or no investment knowledge. Less than one-fourth (23 percent) of investors in the latter group indicates they’ll play the stock market game this year, while 48 percent plan to sit on the sidelines. (Millionaires say the biggest benefit of working with a financial advisor is increased knowledge of investing.)
· Investors with a Stomach for Risk: Self-described aggressive investors, who say they can stomach a roller coaster ride on the stock market, are likely to buy individuals stocks this year. Sixty percent indicate they’ll play the stock market game, compared to 18 percent of investors who call themselves conservative. Most of these risk-adverse investors (57 percent) plan to avoid exchange traded funds or ETFs, mutual funds and individual stocks over the next 12 months.
· Millionaires: More than half (54 percent) of individuals with investable assets of $1 million or more plan to invest in individual stocks over the next year, up from 40 percent in August. Non-millionaires are much less likely to play the stock market game. A little more than one-fourth (26 percent) of those with investable assets of $100,000 up to $500,000 plan to buy individual stocks. Millionaires are also more likely than the non-Millionaires to buy stock mutual funds (56 percent vs. 45 percent) and ETFs (30 percent vs. 8 percent). Individuals with less than $100,000 to invest are most likely sit things out. Roughly 48 percent indicate they’ll stay on the sidelines, compared to 16 percent of Millionaires. (Learn more about the rising popularity of ETFs among Millionaires).
· Men: More than half (51 percent) of men compared to roughly one-third (34 percent) of women plan to invest in individual stocks in the next 12 months. The increased likelihood to play the stock market game reflects the higher levels of investor confidence and knowledge reported by men.