As Americans move past the economic downturn and begin considering plans for investing in the coming year, many believe that technology stocks and gold will set the pace for 2011.
In a recent survey from financial services firm Edward Jones — which has advisers in Davis — 36 percent of Americans said they believe technology stocks will perform best in 2011. Gold followed close behind with 31 percent of Americans betting on a positive performance in 2011.
“While Americans believe that technology stocks and gold will perform the best this year, it‚s important that they keep a diversified and balanced portfolio despite their predictions,” said Kate Warne, investment strategist at Edward Jones, in a news release. “What seems likely to perform best at the beginning of the year may stumble. Unpredictable events highlight the need for broad diversification.”
The survey was based on 1,019 telephone interviews of U.S. adults conducted Feb. 24-27. The survey was conducted with a 95 percent confidence level, the company reported.
Gender seemed to influence this sentiment as 40 percent of female respondents indicated they expect technology stocks to perform best, while 37 percent of male respondents indicated they believe gold will be the winner this year. Age was also a factor as 47 percent of Americans between the ages of 18 and 34 were considerably more optimistic about technology stocks than those in older age brackets.
Geographically, respondents in the West indicated they were more bullish on technology stock performance in 2011 than their counterparts in the rest of the country, with 42 percent indicating that they are optimistic about investing in technology this year.
“Our research of gold’s performance since 1970 indicates that gold tends to fall as quickly as it rises, and over longer-term periods, it fails to match the performance of stocks as represented by the S&P 500,” Warne said in the news release.
“Meanwhile, our research also shows that gold tends to be more volatile than the S&P 500,” Warne said, citing that since 1970 Edward Jones found that 35 percent of the 10-year periods measured resulted in a loss for an investment in gold, compared to a mere 6 percent for the S&P 500.
Optimism about gold’s performance was higher among respondents with lower incomes. Thirty seven percent of those polled in the lowest income bracket (less than $35,000 per year) indicated they believe gold will do best in 2011 and only 25 percent of those in the highest bracket (respondents whose income exceeded $100,000 per year) express the same sentiment.
Americans also noted that they were still uncertain about the performance of blue chip stocks as only 10 percent believe those stocks will perform the best this year. Similarly, real estate stocks scored low, as only 9 percent think it will outperform other asset classes. However, respondents in the Northeast showed more optimism than their peers around the country, with 14 percent indicating they expect real estate stocks to surpass other investments.
The study of 1,019 respondents, conducted by Opinion Research Corp. on behalf of Edward Jones, revealed that household income and size influenced Americans’ choice of stocks. Respondents with a household income of more than $100,000 believe that technology stocks will perform significantly better (39 percent) than gold (25 percent).
Edward Jones advisers in Davis include Allan Telford, 2940 Spafford St., (530) 753-1957; Jeremy Day, 4626 Second St., Suite 130, (530) 747-2002; Manuel Provedor Jr., 1340 East Covell Blvd., (530) 753-9244; and Michael Clark, 429 F St., Suite 1, (530) 753-3917.
Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. The firm’s 12,000-plus financial advisers work directly with nearly 7 million clients to understand their personal goals — from college savings to retirement — and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy.
St. Louis-based Edward Jones ranked No. 11 on Fortune magazine’s “100 Best
Companies to Work For 2011.” For more information, visit www.edwardjones.com.