By Kelly Greene
In the past few months, Nancy Stein, an 80-year-old retired real-estate agent in Northbrook, Ill., has sold a large chunk of the stock she has spent nearly three decades acquiring.
Her certified financial planner, Casey Madden, warned her that she’d owe capital-gains tax, and pointed out that she doesn’t need to sell it, “but she told me, ‘I don’t care. We’ll work on that later,’” he says.
In a Wall Street Journal interview on Oct. 5, Ms. Stein said that the reason for her exit from the stock market was two-fold: First, “I didn’t see how there could be as much debt in this world, and the world go on in the way we’d been going, this country or Europe.”Retir
The other reason: “I felt the people buying were people inside the market. They weren’t the investors of the past who wanted to protect what they had, or see it grow a little bit.”
She’s far from alone in feeling a loss of control over her investments. A September survey of 958 investors by the Gallup Organization found that investor optimism last month fell close to the lows reported during 2008’s financial crisis. You can read the full results here.
Nearly two-thirds of investors in the survey, done quarterly with Wells Fargo & Co., said that they have little or no control over their effort to build and maintain retirement savings. Although the top reasons given were unemployment and a weak economy, extreme market volatility and Washington politics ranked high, too.
Optimism plummeted among U.S. retirees between May and September in the survey’s index to -60 from 61 in May. People who haven’t retired yet were almost as glum, with their optimism swinging to -41 from 24.
What’s particularly worrisome is that people who are still working are counting on their investments even more than people already retired. Almost two-thirds of those surveyed who have not yet retired said that their 401(k) accounts will provide a major source of retirement income – compared with one-third of retirees. And 32% of those still working say stock investments will also provide much of their funding, compared with 26% of retirees. (The survey has a three-percentage-point margin of error.)
Do you share the sentiments of the investors who were surveyed? And are those feelings affecting the choices you’re making for the long haul?