Today’s investors are exposed to more information than any previous generation, with access to data and research that would have been available only to financial professionals in the past, but that does not necessarily lead to improved knowledge or understanding, a new study finds.
To get a better understanding of today’s “evolving investors” and their behaviors and attitudes, Morningstar surveyed over 2,000 people across the United States who were recruited from a nationwide panel that provides strong representation across gender, geography, age, employment, ethnicity, household income and investable assets.
It found that, despite this growing surplus of available investment information, investors suffer from anxiety and decision paralysis. In fact, 26% of respondents say they are uncomfortable making investment decisions and 65% of them feel they don’t have enough knowledge to make the right decisions (this was cited as the top reason for this discomfort).
In addition, those uncomfortable with making investment decisions had the largest chunk of their investable assets (42%) in cash and liquid accounts, despite being in a position where investing would be beneficial, the survey found.
According to the corresponding Voice of the Investor study, these are not rookie investors—95% of the study participants are involved in their household’s investment decisions and those who are actively investing have been doing so for an average of 15 years.
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