November 1, 2012

It’s Still the Economy, Stupid: TD Ameritrade Poll Ahead of Election

A whopping 94% of investors polled voted in the 2008 presidential election—and the same percentage say they will vote this year

TD Ameritrade Investor Sentiment PollThe economy tops the list of voter concerns in the lead-up to the U.S. presidential election, followed by market performance and fiscal spending, according to a recent TD Ameritrade investor sentiment poll.

Retail investors named those three issues as weighing the heaviest on their confidence in the stock market today, according to the TD Ameritrade Holding Corp. Investor Sentiment Poll released last Thursday.

“How much of an election barometer are investors? Consider that 94% of investors surveyed said they voted in the 2008 presidential election,” according to the poll release. “That compares to the total voter turnout of just 64% [estimated by the U.S. Census Bureau]. The same number of investors said they will vote again in 2012.”

Bill Clinton’s successful 1992 presidential campaign owed in part to his “It’s the economy, stupid” strategy, which focused on incumbent George H.W. Bush’s inability to pull the nation out of recession. TD Ameritrade’s online survey of 1,089 investors with at least $10,000 in investable assets, which was conducted by the independent data collection firm Research Now, suggests that voters’ view of the economy will once again determine the outcome of the election pitting President Obama against Mitt Romney.

A total of 71% of people polled said economic issues such as housing and unemployment worried them most, followed by federal spending and deficit issues, at 52%, and political gridlock and upcoming elections, at 44%.

Meanwhile, 32% of those surveyed said they wanted to take on less risk in the current market environment, and 29% claimed they invested less in the stock market over the last six months. However, 87% continued to monitor their portfolios with the same or greater frequency than they did six months ago, and despite their sense of caution, most investors, 66%, said their portfolios are better off than they were four years ago.

“There is a great deal of uncertainty in the macroeconomic environment today, and retail investors have chosen to take a step back and wait for some of it to clear,” said Tom Bradley, president of retail distribution at TD Ameritrade Inc., the broker-dealer subsidiary of TD Ameritrade Holding. “Investors are focused on what they see every day—jobs or the price of a gallon of milk or a tank of gas—and they are not sure what those things will look like down the road. Once we start to see some clarity, we believe investor confidence will build and they will return to the markets.”

At the same time, financial advisors who closely watch the markets may be surprised at what hasn’t been of concern to retail investors: technology issues ranging from trading glitches to problems with high-profile initial public offerings such as the Facebook IPO. Just under 8% of those surveyed said those problems had a negative effect on their psyches.

“Investors are very engaged voters,” Bradley said. “Many pay close attention to the economy and markets, so it’s not surprising that these are such big factors in how they will vote in this election. Regardless of the outcome, the hope is that the election will result in our leaders coming together to make critical decisions that provide clarity on key issues.”

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