48% of Americans Wish They Could Invest In Stocks — Here’s What’s Holding Them Back

For many Americans, it isn't because they fear a recession.

Investing in stocks can be a confounding experience, but a recent GOBankingRates survey found it’s not necessarily a lack of know-how that keeps potential investors away. Nearly half of Americans want to invest in the stock market, but most lack the necessary funds to do so, according to the survey.

GOBankingRates asked nearly 900 respondents questions such as what prevents them from investing, whether or not the market primarily helps rich people and what they would do with thousands of dollars if they had it on hand.

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Why Americans Aren’t Investing — Even Though They Want To

Nearly half of respondents wished they could invest in the stock market, but could not due to lack of funds, experience or because of worries about the looming possibility of a recession.

However, 34% of respondents didn’t want to invest in the stock market at all.

The disparity between those who want to invest in stocks versus those who already do points to a significant gap in terms of financial capital. Nearly 40% of those surveyed cited too little or no money as the reason they couldn’t invest. Older adults ages 45 to 64 were most likely to feel that sentiment. Over 40% of women surveyed wanted to invest as well but couldn’t due to lack of funds, compared to nearly 36% of men.

It’s perhaps even more revealing to examine those that don’t want to invest in the stock market. A third of Gen Z respondents didn’t care to invest, which could indicate lack of faith in the economy — in fact, only 45% of people ages 18 to 29 have a positive view of capitalism, according to a 2018 Gallup poll.

Although older millennials had a stronger desire to invest, it will decrease with age. Once respondents hit 45, a third to 40% no longer wanted to invest in stocks, depending on the age bracket.

Survey Question: What do you think is the minimum initial investment required for someone to start investing in the stock market?

Minimum Initial InvestmentResponse Rate
$10,000 or more3.04%
There is no requirement; you can invest any amount39.82%

A majority of respondents agreed on one thing: You can invest any amount into stocks. It’s not surprising that nearly 37% of respondents believe that less than $499 is a sound minimum investment, given that figure is more achievable for those who want to invest but can’t due to lack of funds. While this is technically true, a more comfortable starting point is between $500 and $1,000.

About 26% of Americans Believe Stocks Are the Riskiest Investment

More than a quarter of respondents thought investing in the stock market was the riskiest investment tool, although 40% believe cryptocurrency should be avoided.

Interestingly, the two youngest demographics from ages 18 to 34 also responded with cryptocurrency as the riskiest investment, perhaps indicating a better understanding of how it works. A quarter of affluent — emphasis on affluent — millennials invest in cryptocurrency, according to an Edelman study. Older adults ages 35 and over, meanwhile, still view stocks as one of the riskiest asset classes.

A gender breakdown of this question revealed that men view stocks as slightly less risky than women, although they view cryptocurrency as a far greater portfolio risk than women do.

Below is a table breaking down how other asset classes are viewed by their risk.

Survey Question: Which of the following do you think is the riskiest investment for investors?

Type of InvestmentResponse Rate
Real estate10.80%
ETFs/mutual funds/index funds6.86%
Savings accounts (CDs, money market, etc.)7.87%

GOBankingRates also asked respondents whether they agreed with the following statement: “When the stock market is up or down, it only benefits or hurts the rich.”

A third agreed with this statement while the rest disagreed. The demographic who most agreed was the ages 25 to 34 group, with 37% of respondents. About a third of all respondents for each demographic tended to agree; the ages 18 to 24 group was the only one with sub-30% of respondents agreeing. Both men and women’s response ratio fell in-line with the overall results.

How Would You Invest $1,000 and $100,000?

Every demographic thought that an extra $1,000 is best put away in a savings account. Gold and metals might raise some eyes as the second-best way to invest money, but those results look skewed thanks to older folk: 20% of respondents for the two oldest demographics went with gold and metal, versus only 10% of those surveyed from ages 18 to 24. Men slightly preferred gold and metal over women, although this was still each demographic’s second choice for the best way to invest $1,000.

Survey Question: If you received an extra $1,000 or $100,000, what do you think is the best way to invest the money?

Type of InvestmentExtra $1,000Extra $100,000
Real estate12.82%27.90%
ETFs/mutual funds/index funds11.59%10.24%
Savings accounts (CDs, money market, etc.)31.61%24.86%

More money means more problems, but it also means more opportunity for investments. An extra $100,000 laying around changed respondents’ opinion on what to invest in, as this time nearly 28% of those surveyed preferred real estate over savings accounts. However, it’s worth noting that savings accounts were still seen as one of the best ways to invest $100,000, with almost a quarter of respondents choosing it.

Savings accounts are seen as reliable — if low-return — investing tools, and a sizable preference for that could indicate a number of things, including an overreliance on them, not knowing enough about high-risk investments or just simple familiarity.

Related: The Best Online Stock Brokers for Beginners

How To Start Investing In the Stock Market

Here are some basic guidelines recommended by GOBankingRates for starting out in the stock market:

  • Budget: How much are you comfortable investing? And more critically, how much are you comfortable losing? Only approach stocks once you have an idea of your budget.
  • Homework: Whatever stocks you’re targeting, you should also figure out the financial help of the company. A company’s financials can be found through a number of sites, such as Yahoo! Finance and Nasdaq.
  • Broker: Brokerages carry their own fees and benefits, such as a number of free trades upon creating an account. Always look at a broker’s offerings to see if it can help you maximize your investment.

Keep reading to learn about the best robo-advisors for investors.

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