Americans' feelings on financial security

Americans are still a risk-averse bunch when it comes to how they'd invest money that isn't needed for more than 10 years. The most common response, cited by 1-in-4 respondents, was cash investments. Real estate was a close second, at 23 percent.

The stock market records are apparently getting the attention of some investors, as the percentage favoring the stock market increased to 19 percent from 14 percent last year. Gold or other precious metals were selected by 14 percent of respondents, while bonds yielded just 5 percent of the responses, down from 8 percent one year ago.

One notable finding was that adults under age 30 had the highest preference for cash, at 39 percent, compared to all other age brackets and were three times more likely to cite cash than the stock market, for money not needed for more than 10 years. This preference for cash and aversion to the stock market for long-term money among young adults is very troubling considering this age group has the biggest retirement savings burden. And they won't get there without being willing to assume some risk along the way.

In terms of financial security, Americans are still indicating improved financial security compared to one year ago, but barely. The Financial Security Index clocked in at 100.1, down from 101.5 in June. Only job security delivered a slightly better reading than last month, with each of the other components a tad weaker. But 4 of the 5 components show improvement compared to one year ago, with savings remaining the lone sore spot.

For more information on this month's Financial Security Index, just visit I'm Greg McBride.


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