A vast majority of American investors are lacking the "investor survival skills" needed to build their savings into a retirement nest egg, according to the Securities Investor Protection Corporation /Investor Protection Trust survey conducted by Opinion Research Corp.
The poll gauged the knowledge and behavior of investors who either manage their own accounts or work directly with financial professionals.
More than four out of five investors (83 percent) failed the SIPC/IPT test of key knowledge and behavior. Only 17 percent of respondents correctly answered a sufficient number of questions on knowledge (i.e. six out of eight questions) and behavior (three out of four questions). Women were more likely than men to fail the test by a margin of 91 percent to 77 percent.
Just one in five investors, or 21 percent, said that they practice all four of the desirable behavioral traits focused on in the SIPC/IPT survey: reading prospectuses, regularly reviewing account statements, checking out the disciplinary backgrounds of brokers/financial planners, and having a financial plan in place.
Two of the encouraging findings in the survey findings centered on account statements and diversification. Nine in 10 investors said that they regularly review their brokerage account and/or mutual fund statements, while nearly three out of four investors showed that they understand the concept of diversification.
The SIPC/IPT survey polled a sample of 2,063 adults comprising 1,036 men and 1,027 women 18 years of age and older, living in private households in the continental United States.
For full survey findings, go to http://www.sipc.org/survivalquiz on the Web. The online, self-scoring version of the SIPC/IPT survey is available online at http://www.sipc.org/survivalquiz.
