Wells Fargo/Gallup: Investors Turn Negative Post Elections

  Wells Fargo/Gallup: Investors Turn Negative Post Elections

  *69% Cite “Divided Government” and “Federal Deficit” as Top Concerns
  *59% Say Now is not a Good Time to Invest in the Markets
  *Want Administration to Promote Saving as a National Priority

Business Wire

CHARLOTTE, N.C. -- December 12, 2012

Overall U.S. investor optimism has plummeted to -8, down from +16 recorded in
July and +24 in May according to the quarterly Wells Fargo/Gallup Investor and
Retirement Optimism Index conducted November 9-17, 2012. The dip in sentiment
is comparable to the -9 index recorded in November 2011, and is linked to
pessimism about the overall economy. More than half (59%) say now “is not a
good time” to invest in the markets, an increase from 48% recorded in May.
Sixty-eight percent say they have “little to no” confidence in the stock
market as “a place to invest for retirement.”

Among a list of eight factors, 69% of investors ranked the deficit and divided
government as the top factors “hurting” the investing climate “a lot,”
followed by unemployment (67%) and the global economic slowdown (63%).

Seventy-two percent of investors say it is “somewhat likely” to “very likely”
that the automatic tax increases and spending cuts of the “fiscal cliff” will
be pushed out six to 12 months to give the President and Congress more time to
negotiate. Seventy percent say the country will go into recession in 2013 if
“fiscal cliff” issues are not resolved. Over half of investors (54%) say the
outcome of the Presidential and Congressional elections have made it “more
difficult” to save for retirement.

“No question about the fact there is a gloomy sentiment among investors right
now, and it looks like it’s connected to a belief that the elections will
result in more Washington gridlock. The fact that 80% of investors say we need
a national effort in place to encourage Americans to save is eye opening.
Clearly, people want to feel like they have the wind at their backs and the
tools to increase savings,” said Joe Ready, director of Institutional
Retirement and Trust at Wells Fargo.

The 401(k) is Very Important

Eight in 10 investors (83%) say the 401(k) and similar tax-advantaged accounts
are “extremely” important (43%) or “very” important (40%) to the ability of
Americans to retire comfortably in the future. Investors were asked how
important it is for the President and Congress to undertake actions to enhance
the 401(k), and investors conveyed the following:

  *69% say it is “extremely” or “very important” that the government find
    ways to financially encourage every company to offer its employees a
    401(k) retirement savings option;
  *69% say it is “extremely” or “very important” that the government find
    ways to financially encourage every American to participate in their
    employer’s 401(k) retirement savings option;
  *66% say it is “extremely” or “very important” that the government find
    ways to allow Americans with 401(k) retirement savings to obtain more
    quality investment advice;
  *66% say it is “extremely” or “very important” that the government find
    ways to allow Americans more investment flexibility with their 401(k)
    retirement savings.

When investors were asked whose responsibility it is to see that Americans
have the opportunity to build savings for a comfortable retirement, over half
(58%) say it is a “shared” responsibility between government, business (in the
form of a pension), and the individual. About a third of investors (36%) say
the individual on his/her own is responsible.

Saving Should Be a National Priority

A majority (80%) of investors say the Administration should make it a national
priority to encourage Americans to save.

Over three-fourths (76%) of investors say the current administration should
make strengthening Social Security so that it exists for future generations a
priority over the next four years.

Further, the poll asked investors to rank responsibility levels for teaching
Americans to save: 88% of investors point to parents and family as having a
“great deal” or “quite a lot” of responsibility, 84% indicate individuals on
their own, and rounding out the top three, 67% of investors point to financial
advisors as having a “great deal” or “quite a lot” of responsibility to teach
saving. Other groups that were cited were bankers (60%), teachers (55%) and
employers (48%).

Sixty-nine percent of investors say they are “somewhat” to “extremely” worried
they will outlive their savings in retirement while 68% are “somewhat” to
“extremely” worried they will experience a large reduction in their standard
of living during retirement, and 56% are worried they will be forced to work
during retirement to maintain their standard of living.

Perceptions of the Stock Market

A plurality of investors (45%) say the outcome of the November elections will
cause the stock market to go down, while only 15% say the markets will go
higher. Thirty-nine percent say the elections will leave the markets where
they are now.

Although a majority of investors are not confident in the stock market, about
half (52%) say they have not reduced their investments in the markets, while
45% say they have.

Investors who have pulled money out of the market were asked if they “regret”
doing so over the past four years, and 67% say they have “no regrets.” Seventy
percent say they plan to leave their exposure in the market unchanged, while
20% say they will increase their stock holdings.

Planning and Confidence

Over half of investors (55%) say they have taken the time to do a calculation
about their future retirement needs, while 43% say they have “guessed” at the
savings they will need. Thirty-seven percent of all investors say they have a
specific written plan for retirement, up from 31% in July and 28% percent in
May.

Seventy-six percent of non-retired and 72% of retired Americans say having a
financial plan with specific goals and targets gives them “confidence” they’ll
meet their financial goals.

When asked why they did not have a specific financial plan for retirement, 44%
of the non-retired cite “not having enough money” as the main reason, while
18% say they did not have the time to make a plan, and 12% say they did not
need a plan.

Perception of the Election and Presidential Priorities

Investors are divided in their view of whether to be optimistic about the
economy based on the outcome of elections: 40% are “more optimistic” while 48%
are “less optimistic.”

Eighty-five percent of investors say they have “little” to “no confidence”
that Congress will be able to achieve goals in the next term. Only 14% of
investors think the Congress will accomplish its goals. Fifty-six percent say
they have “little” to “no confidence” that the President will be able to
achieve his goals in the next term versus 43% who believe he will.

Investors say the President and the Congress should make the following
priorities the top three to address in 2013: the creation of new jobs (89%),
addressing the federal deficit (82%) and addressing international terrorism
(68%).

About the Wells Fargo-Gallup Investor and Retirement Index

These findings are part of the Wells Fargo-Gallup Investor and Retirement
Optimism Index, which was conducted November 9-17, 2012. The sampling for the
Index included 1,024 investors randomly selected from across the country with
a margin of sampling error is +/- three percentage points. For this study, the
American investor is defined as any person who is head of a household or a
spouse in any household with total savings and investments of $10,000 or more.
About two in five American households have at least $10,000 in savings and
investments. The sample size is comprised of 74% non-retired and 26% retirees.
Of total respondents, 61% had reported annual income of less than $90,000 and
39% of $90,000 or more. The Wells-Fargo Gallup Investor and Retirement Index
is an enhanced version of Gallup’s Index of Investor Optimism that provides
its historical data.

The Index had a baseline score of 124 when it was established in October 1996.
It peaked at 178 in January 2000, at the height of the dot-com boom, and hit a
low of negative 64 in February 2009.

About Wells Fargo Wealth, Brokerage and Retirement

Wells Fargo Wealth, Brokerage and Retirement (WBR) are one of the largest
wealth managers in the U.S., with $1.3 trillion under management. WBR includes
Wells Fargo Advisors, the third-largest brokerage in the U.S.; Wells Fargo
Private Bank, serving high-net-worth individuals and families; Wells Fargo
Family Wealth, serving ultra-high-net-worth families; and Wells Fargo
Retirement, which manages $231 billion in 401(k) assets for 3.5 million
Americans. Wells Fargo Advisors is the trade name used by two separate
registered broker-dealers: Wells Fargo Advisors, LLC and Wells Fargo Advisors
Financial Network, LLC, Members SIPC, non-bank affiliates of Wells Fargo &
Company.

About Wells Fargo (Twitter @WellsFargo)

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified,
community-based financial services company with $1.2 trillion in assets.
Founded in 1852 and headquartered in San Francisco, Wells Fargo provides
banking, insurance, investments, mortgage, and consumer and commercial finance
through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and
wachovia.com), and other distribution channels across North America and
internationally. With approximately 280,000 team members, Wells Fargo serves
one in three households in America. Wells Fargo & Company was ranked No. 23 on
Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s
vision is to satisfy all our customers’ financial needs and help them succeed
financially.

About Gallup

For more than 70 years, Gallup has been a recognized leader in the measurement
and analysis of people’s attitudes, opinions and behavior. While best known
for the Gallup Poll, founded in 1935, Gallup’s current activities consist
largely of providing marketing and management research, advisory services and
education to the world’s largest corporations and institutions.

Note: Complete survey results and a chart showing the index movement are
available upon request.

Contact:

Wells Fargo & Company
Amy Hyland Jones, 704-383-4995
Allison Chin Leong, 212-350-3824
 
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