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44% Of Americans Want to Leave the Stock Market

How is your 401(k) doing?

Americans apparently don't like this question anymore, because 44% of us are ready to store our money in old pickle jars again just like great-grandpa. Only we won't be collecting nearly as many 1976 Bicentennial quarters and Susan B. Anthony silver dollar coins.

A new Prudential survey asked 1,274 U.S. consumers how confident they are in the stock market, and they said no. Just, no. A full 58% of the people surveyed have lost all their faith in the stock market and think it's no longer worth the risk. 70% don't trust financial firms. But the most startling statistic? 44% say they aren't likely to put money into the stock market ever again. That's right: Ever again.

Wow. We're turning into our Great Depression-era grandparents (or great-grandparents) who told us that the stock market is like gambling and we'll lose our shirts. Why don't we just put our money in a FDIC protected bank, where it can earn a nice, steady 1% interest rate? Or put it in a shoebox, or underneath a mattress? That's even better! We just rolled our eyes and thought "how old fashioned, I'll be a stock market millionaire when I retire" but now we're starting to wonder if our ancestors had a point after all.

It will be fascinating to see what this consumer mindset means for the 401(k) scene. If a higher percentage of employees no longer want to invest in the stock market, will employers find themselves pushing easier-to-understand non-401(k) options to attract great talent as the recession drags on and on economy improves? You can bring your dog to work, we'll subsidize your dry cleaning, and we offer a fantastic pension program! If we have another dot-com 2.0 within the next five years, it could happen. Reality is always stranger than fiction.

There's also a strong generational vibe going on in this study, since 57% of the people surveyed are between the ages of 35 and 54. So financial planners could have their work cut out for them trying to convince skeptical Gen Xers and younger Baby Boomers that the stock market is still the best way to save for retirement. Maybe financial planners should crank Journey's Don't Stop Believing and hand out stylishly-decorated pickle jars during consultations, because when it comes to the stock market we all feel a little bit like we're taking the midnight train going anywhere.

You can access the .pdf of the report by clicking on the Prudential survey link.

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