Wells Fargo/Gallup: Most Americans Pessimistic About Investing Now

Overall, optimism among U.S. investors has taken a dive off a “cliff”, with more than half surveyed saying that now “is not a good time” to invest in the markets, according to the quarterly Wells Fargo/Gallup Investor and Retirement Optimism Index.
Optimism has plummeted to -8, down from +16 recorded in July and +24 in May, according to the newest survery done November 9-17, 2012. The dip in sentiment is comparable to the -9 index recorded in November 2011.
Fifty-Nine percent say now “is not a good time” to invest in the markets, an increase from 48 percent recorded in May. Sixty-eight percent say they have “little to no” confidence in the stock market as “a place to invest for retirement.”
Among a list of eight factors, 69 percent of investors ranked the deficit and divided government as the top contributors to “hurting” the investing climate “a lot,” followed by unemployment (67 percent) and the global economic slowdown (63 percent).
Seventy-two percent of investors say it is “somewhat likely” to “very likely” that the automatic tax increases and spending cuts of the “fiscal cliff” will be pushed out six to 12 months to give the President and Congress more time to negotiate.
Seventy percent say the country will go into recession in 2013 if “fiscal cliff” issues are not resolved. Over half of investors (54 percent) say the outcome of the Presidential and Congressional elections have made it “more difficult” to save for retirement.
“No question about the fact there is a gloomy sentiment among investors right now, and it looks like it’s connected to a belief that the elections will result in more Washington gridlock,” said Joe Ready, director of Institutional Retirement and Trust at Wells Fargo. “The fact that 80% of investors say we need a national effort in place to encourage Americans to save is eye opening. Clearly, people want to feel like they have the wind at their backs and the tools to increase savings,”
Despite the gloomy outlook, eight in 10 investors (83 percent) say the 401(k) and similar tax-advantaged accounts are “extremely” important (43 percent) or “very” important (40 percent) to the ability of Americans to retire comfortably in the future.

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