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41% of retail investors expect negative returns in the next 5 years: Poll

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The Harris Poll and Yahoo Finance are teaming up to create polls that will track real time sentiment of investors. The Harris Poll CEO Will Johnson joins Yahoo Finance’s On The Move to discuss.

Video Transcript

ADAM SHAPIRO: Today, Yahoo Finance and the Harris Poll announced that we have formed an exclusive partnership. And we're going to conduct ongoing polls of investors. This will enable Yahoo Finance to provide a new stream of data-based coverage that's crucial to the 70 million people who use this website on any given month.

To help us understand how all of this is going to play out and some of the insights we're already getting that you can use as you make decisions, we invite into the program Will Johnson, who is the Harris Poll CEO, as well as Rick Newman, who covers politics for us here at Yahoo Finance.

Mr. Johnson, welcome. And can you tell me a little bit more about some of the polling that is going to take place over the next several months that give our consumers an advantage?

WILL JOHNSON: Yes. Thanks for having me. We're really excited at Harris about this poll. We're going to be doing a couple of things. We're going to be tracking real time sentiment of investors as it relates to the economy and markets. So we're going to be able to trend that data over time and see how moods are changing. We're also going to be able to go in and ask relevant topical questions on an ongoing basis to get behind what's driving sentiment and understand what's sort of moving the needle.

RICK NEWMAN: Hey, Will, I want to highlight one set of results we got in this first round of surveys we did. We have all this on our site at YahooFinance.com. And people can go to the full results. We're linking to that at the Harris Poll website. But we found investors expect surprisingly low returns in stocks, even though they say it's important to remain invested in stocks over the next couple of years. What do you think is going on there?

WILL JOHNSON: Yeah, we saw in our survey that almost 40% of the respondents felt that they'd expect, you know, zero to small returns over the next five years. And I think it's clearly a significant number. I think that's driven a lot by just fear and the magnitude of what we're facing.

I mean, over 80% of respondents feel that there is some fear and trepidation when they leave their house. 80% of respondents feel and worry about another spike occurring. And when it comes to economic fear, 50% still have fear of losing their job. So I think that's a big driver.

There's this underlying fear that overhangs that. That said, to your point, I think there is a bullishness of a segment that tends to skew sort of younger males that are still looking at it. And I think that's maybe fear of missing out on a big rebound.

RICK NEWMAN: So what this survey of investors also found, that the top-- if I got this right, the top institution that investors pay attention to for market news is-- alas, it is not Yahoo Finance. Maybe we'll get it to be in the future, but it's the Federal Reserve. And we've talked a lot during the last couple of months on our air about the stock market apparently doing great even as the economy is doing terrible. And it seems to me that people seem to get that it has a lot to do with Federal Reserve policy. Is that your takeaway?

WILL JOHNSON: That's exactly right. That's what we're seeing. There's a lot of confidence in the Fed. And beyond that, there seems to be a lot of confidence in big institutions, whether that's a CDC from a science perspective or big companies like Amazon. So we've seen this feeling that while the day to day uncertainty from a fear perspective is very real, there does seem to be some confidence in those underlying institutions.

ADAM SHAPIRO: Mr. Johnson, I want to talk about some of the highlights from the most recent results. And you know, 82% of us have cut spending, or at least of the respondents say they've cut spending. I think most of us have done that.

But something jumped out. I want to make sure I got this correct. One in seven women said that they don't expect their spending to ever return to normal. Is that accurate?

WILL JOHNSON: Yeah, we saw that. So this has obviously hit everyone, but it's had a disproportionate effect, from an economic impact, on women. We've seen that over 50% of women in our survey stated that their job had been either eliminated or negatively impacted as a result of the recession.

There are a host of reasons you can ascribe that to. Perhaps it's over indexing on some of the industries that have been hit harder are more likely to employ women. But that's very real. I think that that sort of caution is a result of just feeling it in a more significant way.

BRIAN CHEUNG: Will, it's Brian Cheung here. I'm interested in the methodological approach here. So obviously polling, especially in these times when you can't maybe go through some traditional avenues because of the COVID-19-related crisis. How are you collecting this data? We've seen that the BLS, for example, has had difficulty in collecting it. What makes it different in this time to try to get this type of information from people?

WILL JOHNSON: Great question. Well, we go online and we go mobile to connect with consumers. And then we're very judicious, you know, a robust data science team that makes sure that what we are capturing is really representing what's out there. I mean, Harris has been around for 60 years. And our trust is really a result of our ability to make sure that the inputs in are correct.

RICK NEWMAN: Hey, Will, could you address when consumers think life is going to get back to normal? So I think we found something like 65% or 66% of people said it's going to take about a year for their spending to get back to normal. Of course, that's contingent on things going on. But based on what you know about consumers' willingness to get back to normal, what does that tell you about what kind of economic recovery we're going to have, a really long protracted one or a quick one?

WILL JOHNSON: That's right. 12 months seems to be sort of the consensus from consumer and investor sentiment of when science will have found either, you know, good treatments or a credible vaccine. So that seems to be the number right now. Again, what's neat is we're going to be able to sort of real time and see how that shifts with Yahoo as we go week by week.

What's interesting I think is we also see-- so 12 months is far out. But we definitely see this pent up demand. In our numbers, we see month over month rising consumer demand to make major purchases, things like a car, a vacation. So everyone is really chomping at the bit. I think again, it just goes back to, do they feel enough safety to re-engage.

ADAM SHAPIRO: I'm curious about poll accuracy. And I'm one of those people who believes. And I think that the pollsters get it right quite often. I mean, if you look at 2016, they actually got it right, at least for the general election. So as we look at these kinds of issues, when you hear 82% of us or at least of the respondents saying they've cut back on spending, how many people in a poll actually follow up what they say they're doing with their actions?

WILL JOHNSON: That's a great question. Does behavior track to what people are stating? I think it's something you've got to be vigilant to watch. And that's why I think this is just another great input in sort of the mix of metrics that a smart investor should look at.

But I do believe that we've seen our indicators. And you know, Harris has been tracking public sentiment for decades as it relates to what we're going through right now. It does seem to correlate very highly with actual sort of market behavior.

ADAM SHAPIRO: All right. We appreciate your being here. And we know you're going to be back. William Johnson, CEO from the Harris Poll, along with Rick Newman and this new partnership. You can watch these poll results throughout the next several months here on Yahoo Finance.