Recession Delays Many Americans' Retirement

According to the latest Quicken Fiscal Literacy Survey, the bad economic times have also prompted 42% of respondents to conserve wealth by increasing the amount of cash in their retirement portfolios.

Another 36% said they’ve chosen to decrease their risk exposure while a third of high-income Americans have left their portfolio alone.

The survey findings also reveal that:

• a quarter of investors have more than 41% in stocks that move independently of market indices,
• about a third decided to diversify by investing in as many as a dozen stocks,
• while 3% of respondents said they would need as many as 50 stocks to do the job

According to the survey, almost two thirds said they’ve left their non-retirement investments alone. Of those who have tinkered with their non-retirement portfolio, 18% moved into less risky investments while 12% expanded their cash positions.

Crystal Ball Gazing

Even though the economy has hurt many Americans, the survey found a high level of optimism about the future. Some 62% predicted a turnaround sometime this year while a quarter of those investors pointed to the third quarter as their expected economic pickup.

In terms of market sectors investors found attractive:

• nearly half or 49% of investors expect high or extremely high growth in the health care sector,
• ranking a close second was the tech sector at 42%,
• consumer goods was the favorite of 17%,
• while retail attracted 15%

Focusing on specific asset classes, investors polled believe domestic stocks have the best growth potential with 22% favoring value stocks and 21% siding with growth issues. Only 11% specified international stocks.

The Quicken survey was conducted by International Communications Research in December 2001 among 500 Americans who are active investors and who have an annual household income of $75,000.