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Americans' Optimism About Stock Market Highest Since 2000

Americans' Optimism About Stock Market Highest Since 2000

Fifty-four percent of Americans say it is a good idea to invest now

by Joseph Carroll

GALLUP NEWS SERVICE

PRINCETON, NJ -- The Dow Jones Industrial Average has been climbing to new heights over the past several weeks, reaching an all-time closing high of 11,960.51 on Oct. 13. The American public is apparently taking note of these trends. A recent USA Today/Gallup poll finds a majority of Americans saying it is a good idea to invest in the stock market right now. This sentiment is up considerably since April and is now at its highest point since 2000. Americans who own stock -- 63% of the adult population -- are much more likely than those who do not own stock to say it is a good idea to invest in the stock market, as are Americans residing in higher-income as opposed to lower-income households. Partisanship also shapes views of the market, with Republicans more inclined than Democrats to say it is a good idea to invest their money in the stock market.

Overall Results

The Oct. 6-8 poll asked Americans the following question: If you had a thousand dollars to spend, do you think investing it in the stock market would be a good or bad idea? Fifty-four percent of Americans say it would be a good idea to invest that money in the stock market, while 41% say it would be a bad idea. Americans' perceptions about investing in the stock market are much more positive now than they were in April, when 43% said it was a good idea and 50% a bad idea. Americans have not shown this level of optimism about the stock market since 2000, though optimism in early 2004 was nearly as high.

As the graph illustrates, this measure has fluctuated significantly over the years. The public's attitudes about investing in the stock market were most negative in the first survey in which Gallup asked this question. In that February 1990 survey, only 26% of Americans said it was a good idea to invest in the stock market. Perceptions were most positive during the dot.com boom in the late 1990s and in early 2000, with the "good idea" percentage reaching a high of 67% in January 2000.

Stock Owners vs. Those Who Don't Own Stock

Sixty-three percent of Americans say they have money invested in the stock market right now -- in an individual stock, a stock mutual fund, or a self-directed 401(k) or IRA. Historically, Americans who own stocks have always been more likely than those who do not own stocks to say it is a good idea to invest in the stock market.

Two in three stock owners (68%) currently say it is a good idea to invest in the market, up from 55% in April. Stock owners were much more optimistic about investing in the market in the late 1990s and in early 2000, with a high of 82% saying it was a good idea to invest in April 1998. As the economy soured in 2001, so did stock owners' assessments of the market, with only 40% saying it was a good idea to invest in stocks in July 2002.

Among those who do not own stocks, just 29% say it is a good idea to invest in the stock market now. This sentiment has shown only modest fluctuation in recent years, ranging between 20% and 33% since 2001. During the boom years, the percentage was higher; still, no more than 48% of those who do not own stocks have ever said it was a good idea to invest in the market.

Higher- vs. Lower-Income Households

Americans residing in higher-income households are more likely than those residing in lower-income households to say it is a good idea to invest in the stock market.

Seventy-two percent of Americans in households earning $75,000 or more per year say it is a good idea to invest, compared with 52% of those earning between $30,000 and $74,999 and 40% of those earning less than $30,000. Gallup has found similar trends among these three income groups in recent years.

Partisanship and Investing in the Stock Market

Republicans are significantly more likely than Democrats to report having money invested in the stock market, by a 77% to 57% margin. Fifty-eight percent of independents say they have money invested. So, not surprisingly, Republicans are much more inclined than Democrats or independents to say it is a good idea to invest in the stock market. Currently, 66% of Republicans say it is a good idea, while 51% of independents and 47% of Democrats feel this way. This pattern has held true in most of the surveys in which Gallup has asked this question. From 1997 through 2000, the gap between Republicans' and Democrats' perceptions that it was a good idea to invest in the market was generally much narrower than at any point since 2001. Since that time, the gap between the two partisan groups has expanded.

Survey Methods

Results are based on telephone interviews with 1,007 national adults, aged 18 and older, conducted Oct. 6-8, 2006. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

If you had a thousand dollars to spend, do you think investing it in the stock market would be a good or bad idea?

Good
idea

Bad
idea

DEPENDS
(vol.)

No
opinion

%

%

%

%

2006 Oct 6-8

54

41

2

2

2006 Apr 10-13

43

50

4

4

2005 Apr 4-7

45

51

2

2

2004 Apr 5-8

47

48

3

2

2004 Jan 2-5

53

43

2

2

2003 Jun 9-10

41

57

1

1

2003 Apr 7-9

34

63

2

1

2002 Jul 29-31

37

58

3

2

2002 Jul 22-24

31

63

3

3

2002 Jun 21-23

45

51

2

2

2002 Apr 8-11

47

48

3

2

2001 Apr 6-8

42

53

2

3

2001 Jan 10-14

42

53

3

2

2000 Dec 2-4

46

49

2

3

2000 Oct 13-14

57

36

2

5

2000 Jan 7-10

67

28

2

3

1999 Oct 21-24

51

44

2

3

1999 Sep 10-14

60

33

3

4

1999 June 4-5

60

34

3

3

1999 Mar 12-14

59

35

3

3

1998 Sep 1

46

48

3

3

1998 Apr 17-19

65

28

4

3

1997 Oct 30

46

47

3

4

1997 Oct 27

53

43

1

9

1997 Jul 25-27

62

33

1

4

1994 Mar 9-10

38

46

9

7

1990 Feb

26

68

2

4

(vol.) = Volunteered response

Do you personally, or jointly with a spouse, have any money invested in the stock market right now -- either in an individual stock, a stock mutual fund, or in a self-directed 401(k) or IRA?

Yes

No

No opinion

%

%

%

2006 Oct 6-8

63

35

1

2006 Apr 10-13

61

38

1

2005 Apr 4-7

62

38

*

2005 Mar 18-20

60

39

1

2004 Apr 5-8

61

38

1

2004 Jan 2-5

65

34

1

2003 Jun 9-10

61

37

2

2003 Apr 7-9

60

39

1

2003 Jan 10-12

62

37

1

2002 Oct 3-6

59

40

1

2002 Jul 29-31

66

34

*

2002 Jul 26-28

63

35

2

2002 Jul 22-24

56

43

1

2002 Jul 5-8

60

39

1

2002 Jun 28-30

67

33

*

2001 Aug 3-5

61

38

1

2001 Apr 6-8

62

36

2

2001 Mar 14 ^

64

35

1

2000 May 5-7

54

44

2

2000 Apr 7-9

62

37

1

2000 Mar 10-12

61

37

2

2000 Jan 7-10

61

38

1

1999 Oct 21-24

60

39

1

1999 Sep 10-14

57

42

1

1999 Jun 4-5

57

42

1

1999 Apr 30-May 2

58

40

2

1999 Mar 12-14

61

39

*

1998 Sep 1 ^

60

39

1

^ Polls conducted entirely in one day are subject to additional error or bias not found in polls conducted over several days.

* Less than 0.5%

Gallup

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Gallup https://news.gallup.com/poll/24979/Americans-Optimism-About-Stock-Market-Highest-Since-2000.aspx
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