Online Extra: BW/Harris Poll: Investors' Expectations

More people than at any time in the last seven years are predicting ultra-low long-run returns on stocks

If you had to choose the one investment that you think would be the best to make right now, which would it be?
1989 1996 1997 1998 1999 2000 2001 2002
Real estate 40 25 33 30 30 28 39 53
Mutual funds 8 24 21 18 20 21 13 9
Bank or savings & loan deposits 8 8 9 11 12 14 7 6
Common stock 5 10 12 13 13 8 7 5
Money-market funds 11 6 6 7 7 8 5 4
Gold or other precious metals 8 7 4 4 5 4 5 5
Government bonds 15 9 5 5 5 5 8 6
Corporate bonds 3 2 4 3 2 1 3 2
I don't save or invest at all NA 3 1 3 1 3 4 2
Not sure 2 6 5 6 4 7 9 7
Thinking about your household's total assets including real estate, stocks including stock mutual funds, bonds including bond mutual funds, savings instruments, and cash, does your household own any of the following?
Yes No

Not

sure

Real estate
1999 62 34 2
2000 59 32 1
2001 60 37 3
2002 62 36 1
Stocks including stock mutual funds
1999 50 46 2
2000 47 42 2
2001 47 49 3
2002 47 50 2
Bonds including bond mutual funds
1999 28 67 3
2000 27 61 4
2001 26 69 4
2002 28 68 3
Savings instruments and cash
1999 74 23 1
2000 67 21 2
2001 72 25 2
2002 69 29 1
Some other asset
1999 22 74 2
2000 34 55 2
2001 34 62 4
2002 34 62 3

How do you think terrorism and the war against it will affect the stock market over the next 12 months -- very positively, somewhat positively, somewhat negatively, very negatively, or will it have no effect at all?

2001 2002
Very positively 11 14
Somewhat positively 28 20
Somewhat negatively 32 38
Very negatively 8 12
No effect at all 14 10
Not sure 7 6

How do you think the changing situation in the Middle East will affect the stock market over the next 12 months --- very positively, somewhat positively, somewhat negatively, very negatively, or will it have no effect at all?

2002
Very positively 12
Somewhat positively 22
Somewhat negatively 34
Very negatively 13
No effect at all 13
Not sure 6

Some people say that small investors can do as well as big investors in the stock market. Do you agree or disagree with this statement? Do you agree strongly, agree somewhat, disagree somewhat, or disagree strongly?

2002
Agree strongly 18
Agree somewhat 34
Neither agree nor disagree 3
Disagree somewhat 25
Disagree strongly 16
Not sure 4
Have you bought common stock or shares in a stock mutual fund within the past year?
1999 2000 2001 2002
Have bought 57 59 53 50
Have not bought 42 39 46 49
Not sure 1 1 1 1

Over the next six months, do you think you will probably invest a lot more in stocks or stock mutual funds, invest somewhat more in stocks or stock mutual funds, reduce your investment in stocks or stock mutual funds somewhat, or reduce your investments a lot?

1999 2000 2001 2002
Invest a lot more 10 7 4 4
Invest somewhat more 37 35 24 20
Reduce somewhat 10 13 15 14
Reduce a lot 5 5 9 14
Stay the same 29 32 42 42
I don't save or invest at all 4 2 1 2
Not sure 6 4 5 4

Over the next year, do you think stocks will go up, stay about the same, or go down?
1996 1997 1998 1999 2000 2001 2002
Go up 39 39 37 52 33 52 41
Stay about the same 36 38 34 20 26 25 27
Go down 19 16 21 17 23 14 20
Not sure 6 7 8 10 18 9 12

Over the next 12 months, how would you rate the chance of another big crash in the stock market -- very likely, somewhat likely, not very likely, or not at all likely?

1996 1997 1998 1999 2000 2001 2002
Very likely 12 13 14 15 13 14 17
Somewhat likely 35 43 41 37 37 38 39
Not very likely 35 31 29 33 35 32 28
Not likely at all 15 10 11 11 7 11 9
Not sure 3 3 4 4 7 5 6

In the long run, what sort of total returns (capital gains plus dividends) do you expect the stock market to produce for you -- below 5% a year, 5% to below 10% a year, 10% to below 12% a year, 12% to below 15% a year, or 15 % or higher a year?

1996 1997 1998 1999 2000 2001 2002
Below 5% a year 8 4 9 7 7 12 20
5% to below 10% a year 36 27 26 30 33 42 42
10% to below 12% a year 29 30 29 27 25 24 18
12% to below 15% a year 13 19 18 14 12 9 6
15% or higher a year 9 14 17 13 12 7 6
Not sure 5 5 2 8 10 7 9

How confident are you that the stocks or mutual funds you pick will beat the market averages -- very confident, somewhat confident, not very confident, or not at all confident?

2000 2001 2002
Very confident 17 14 10
Somewhat confident 62 62 54
Not very confident 12 14 24
Not at all confident 3 5 8
Not sure 5 4 4

Overall, how would you describe the stock market's valuation -- very overpriced, somewhat overpriced, fairly valued, somewhat cheap, or very cheap?

1999 2000 2001 2002
Very overpriced 12 11 4 8
Somewhat overpriced 46 40 29 28
Fairly valued 31 28 39 37
Somewhat cheap 4 9 17 15
Very cheap * 1 3 4
Not sure 6 11 8 9

Overall, how would you describe the valuation of international stocks -- very overpriced, somewhat overpriced, fairly valued, somewhat cheap, or very cheap?

1999 2000 2001 2002
Very overpriced 6 7 5 5
Somewhat overpriced 22 23 18 22
Fairly valued 19 17 21 18
Somewhat cheap 11 10 8 10
Very cheap 1 2 2 2
Not sure 39 41 46 41

Overall, how would you describe the valuation of technology stocks -- very overpriced, somewhat overpriced, fairly valued, somewhat cheap, or very cheap?

2000 2001 2002
Very overpriced 18 15 14
Somewhat overpriced 35 31 32
Fairly valued 19 22 22
Somewhat cheap 6 17 13
Very cheap 1 4 5
Not sure 21 11 14

Do you believe that next year, the stock market will be -- less volatile, about as volatile as this year, or more volatile?

1998 1999 2000 2001 2002
Less volatile 16 11 24 42 27
About as volatile as this year 56 54 43 40 49
More volatile 26 28 24 12 19
Not sure 2 7 9 6 5

Telephone survey conducted in the U.S. from Dec. 6-9, 2002 among a nationwide cross section of 1,004 adults who are 18 or older (Margin of error +/- 3.0). Percentages may not always add up to 100% because of computer rounding or the acceptance of multiple answers from respondents answering that question

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