See no evil: Clients still turning a blind eye to losses

Recession spurred a state of denial for many, Schwab survey shows

Aug 4, 2009 @ 2:55 pm

By Sue Asci

Investors have been ignoring critical information about their investments — and also rarely have been talking with their advisers — since the financial crisis began last year, according to a new survey commissioned by The Charles Schwab Corp.

In fact, 36% of respondents said they did not know which mutual funds they owned, according to a nationwide survey of 602 mutual fund owners conducted online in April by Kelton Research of Culver City, Calif., and New York.

Meanwhile, only 31% of those surveyed said they spoke with their broker or adviser on a regular basis, the survey reported.

A full 40% reported that they had not become more knowledgeable about their investments since the markets began their massive decline, while 45% said they had. [other 15% no opinion – dh]

“I think some investors tend to be overwhelmed or intimidated by investing,” said Peter Crawford, senior vice president for investment management at Schwab of San Francisco.

“People don’t want to look at their statements and see that red ink,” he continued. “They may think if they don’t look at it, it won’t be as bad.”

Looking to the future, most of the investors surveyed, or 60%, said they were not planning to make changes to their portfolio in the next six months.

Thirty-nine percent of respondents said that they had made changes to their portfolio allocations since the stock market began to plummet in September.

Only 22% of respondents said they planned to add assets to a fund, and 18% said they planned to invest less, the survey found.


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