More than one-third of Americans, 36%, said that they believe technology stocks will perform best in 2011, followed by gold, 31%, according to a recent Edward Jones survey released March 2. The results, though, appear to be skewed by gender.
The survey of more than 1,000 investors found that 40% of female investors expect tech stocks to perform best, while more than one-third of male respondents, 37%, believe gold will be the winner this year.
A high level of investors between the ages of 18 and 34, 47%, are much more optimistic about tech stocks than those in older age brackets, and a large number of survey respondents in the West, 42%, are more bullish on these stocks than their counterparts in the rest of the country, Edward Jones reports.
Also, those in lower income brackets tend to favor gold over technology, says the broker-deal, which includes more than 11,868 U.S. financial advisors and 620 FAs in Canada.
"While Americans believe that technology stocks and gold will perform the best this year, it's important that they keep a diversified and balanced portfolio despite their predictions," said Kate Warne (left), investment strategist at Edward Jones. "What seems likely to perform best at the beginning of the year may stumble. Unpredictable events highlight the need for broad diversification."
"Our research of gold's performance since 1970 indicates that gold tends to fall as quickly as it rises, and over longer-term periods, it fails to match the performance of stocks as represented by the S&P 500," Warne said in a phone interview on Tuesday with AdvisorOne.
"Our research also shows that gold tends to be considerably more volatile than the S&P 500," Warne said, citing that since 1970 Edward Jones found that 35% of the 10-year periods measured resulted in a loss for an investment in gold, compared to a mere 6% for the S&P 500.
“The gender gap tends to shows that women are more conservative in their investing approach than men …,” Warne said. “Thus, it’s somewhat hard to align these results with what we’ve seen before.”
Still, Warne says, women may see technology as a sector that is tied to trends they see in corporate and consumer spending, which gives this strategy more of a “conservative slant” than gold investing, which is seen as “more speculative.”
“That could be a link, though both sectors are risky” she added. The technology fundamentals, though, are positive, and that’s not so with gold.”
What is similar with both investment approaches, Warne explains, is that investors want to catch up after the financial crisis. “They are stretching in the hope of getting better returns in the future, though [women and men] are stretching in different ways.”
Both sectors have done well in the recent past, which makes them riskier investments than sectors that have underperformed more recently. “It’s the same idea being represented but with a difference in execution,” said Warne.
The investment strategist is surprised that more investors aren’t more focused on blue-chip stocks. “Some of the largest U.S. comps with global operations are attractive today, because they haven’t gone up like some other stocks and should benefit from rising global demand. Plus, they pay dividends.”
Edward Jones conducts these surveys with the goal of capturing “the mood of investors, which makes a big difference in how they invest and that can mean they aren’t necessarily going to make the best decisions,” explained Warne. “We want to see their feelings and help them avoid making any possible mistakes through a discussion.”
“We are pleased by the latest survey results,” she added. “The results are a little different than what we expected. But they show more optimism, as people view riskier investments as the best place to put their money. This is an optimistic approach, but it can mean they put their money not in the right places due to excitement.”