Monday, March 29

Trusting Ourselves: We Know Best?


While the economic climate is still on shaky ground, American investors are becoming more optimistic about 2010. Forty-three percent of young investors (ages 21-29) and 33 percent of older investors (40-65) plan to invest more in 2010. One in four expect returns between 10 and 20 percent.

The study, conducted by ShareBuilder from ING DIRECT USA, indicates fewer investors are relying on brokers, financial advisors, or planners for advice. Most are relying on their own ability to research companies and rely on public sources of information.

Where Are Investors Turning For Advice?

• 49 percent of investors are reading financial Web sites and blogs.
• 39 percent of investors read financial print publications.
• 35 percent of investors rely on advice from financial planners.
• 18 percent of investors listen to brokers.

Interestingly enough, not all of the results mesh well with Edleman Trust Barometer released in February. According to the Edleman assessment, analysts and experts were among the most credible sources of information, but according to the ING DIRECT study, another informant seems to pull ahead of the pack — people trust themselves.

Almost half of those ages 40-65 have reduced or eliminated their reliance on financial professionals, while 37 percent of investors ages 21-39 have done so. However, despite increasing self-reliance, the majority of respondents believe it requires hundreds or thousands of dollars to begin investing. It doesn't.

When combined with other surveys and studies conducted over the last few years, consumers are increasingly self-reliant on everything from medical care to marketing. Young musical artists believe they can get more mileage from social media than labels. Investors believe they can capture returns as high as 30 percent on their own. And social media experts frequently advise that business owners abandon marketing firms in favor of establishing a personal presence within social networks.

While the increased personal responsibility is admirable, one might wonder where it all ends. Becoming a quasi-expert in every subject seems to be tenuous in that, as Ike Pigott likes to point out, individuals are not scalable. At some point, we have to rely on others in order to get things done.

It also creates an interesting challenge for both experts and marketers. In a world where individuals always know better themselves, trust becomes an illusion in that people trust your opinion and insight but not your ability to execute the plan.

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