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Investors remain fearful of stocks, survey says

Although it’s been more than two years since the market began a long rebound from its bear-market low, many individual investors remain extremely fearful of stocks.

According to a survey released Wednesdayby Prudential Financial Inc., 58% of Americans say they’ve lost all faith in stocks, while 44% say they’re unlikely to ever invest more money in the market.

In one measure of what might be dubbed the New Trepidation, just 37% of investors say they’re investing aggressively in stocks, down from 46% before the recession. Likewise, 40% now characterize their portfolios as conservative, compared with 33% previously.

But investors seem to realize the potential long-term negative consequences of shunning stocks, with 73% saying they worry that their more conservative investments won’t earn enough to make up for previous losses.

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Even with Wednesday’s 279.65-point drop, the Dow Jones industrial average is up 88% since its March 2009 low.

“It’s clear that the financial crisis has driven fundamental changes in the way Americans are saving for retirement, with millions of Americans perhaps at even greater risk of having insufficient income for a secure retirement,” said Christine Marcks, president of Prudential’s retirement unit.

Where are these investors turning for help?

Apparently, not to financial-service companies such as Prudential.

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Signaling “a pervasive lack of trust,” 69% of respondents said few financial firms are trustworthy and 62% couldn’t name a single firm they trusted, according to the survey.

“Americans’ lack of trust in the financial services industry is a significant issue,” the report declares.

Prudential polled 1,274 Americans online from Dec. 17 through Jan. 5 for the survey, which has a margin of error of plus or minus 3.1%.

walter.hamilton@latimes.com


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