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Energy, Real Estate and Pharmaceuticals Seen As Best Industries for Investing

Posted on: Tuesday, 13 December 2005, 12:00 CST

MADISON HEIGHTS, Mich., Dec. 13 /PRNewswire/ -- Individual investors named energy, real estate and pharmaceuticals as the top three industries for investment in 2006, according to BetterInvesting's most recent Voice of the American Shareholder (VOAS) poll. Citing data from the survey of more than 1,000 investors, BetterInvesting reports that 22 percent of respondents selected energy as the best industry to invest in now. Nearly half (46%) selected energy as one of the top three best investment opportunities, up from 32 percent in November 2004. Two-thirds (66%) of investors who say energy is the best investment today indicate the potential growth of the industry as the top reason.

The real estate industry ranked second with 16 percent of shareholders choosing it as a good investment in the current environment. In November 2004, real estate was the top choice with 22 percent. Rounding out the top three was the pharmaceutical industry with 12 percent of respondents making this choice.

American shareholders, cautious about the current energy situation, pegged the automotive industry, travel and government as the worst segments for investment. Forty-four percent put the automotive industry among the top three worst investments. Travel, selected by 36 percent, and government, selected by 29 percent, finished the top three worst segments in which to invest. Shareholders cited out-of-control costs as the primary reason why these segments are viewed so dimly.

While in November 2004, 23 percent of VOAS respondents selected the health care industry as one of the three worst investments, now only 11 percent of shareholders hold this view.

Compared to one year ago, more shareholders say the automotive industry is not a potential growth industry (37% versus 21%) and its services and products are out of date (27% versus 12%).

Go to the links below for summary lists of the industries investors consider the best and worst investments as reported in the VOAS poll:

Best: http://www.betterinvestingnewsroom.org/voice/wave7-bestindustries.pdf Worst: http://www.betterinvestingnewsroom.org/voice/wave7-worstindustries.pdf BetterInvesting Shareholder Confidence Index at All-time Low -- The BetterInvesting Shareholder Confidence Index (SCI) is at an all- time low at just 1.2 (on a scale from -100 to +100 where zero equals a neutral attitude towards the stock market). -- Confidence is lowest in the Midwest with a SCI of -1.0, down dramatically from January 2004 when the region's investors held a SCI of 21.3. -- The Eastern region holds the highest SCI with 2.6, but also has dropped, from a 16.8 in January 2004. -- According to the SCI, confidence decreases with age, as investors 65 and older hold a SCI of -8.9 while investors 35 or younger hold an 8.3. -- The proportion of investors who believe the U.S. economy is moving in the right direction is at its lowest level since September 2003 (46% vs. 57% in September 2003).

Continuing the downward trend from May 2005, fewer than four in 10 (38%) shareholders agree that it is a good time for new investors to get involved in the stock market.

"During what seems to be down times in the market, our members know that by following BetterInvesting's principles of investing regularly in growth companies, reinvesting all earnings and diversifying investments, individuals can ride out practically any market and see their investments show a profit over time," says Ken Janke, chairman of NAIC's BetterInvesting.

Investors Look Cautiously to 2006

With a cautious optimism for next year, three in four investors (77%) predict that the market will improve or stay about the same in 2006. However, as compared to November 2004, more shareholders think inflation (66% versus 78%) and unemployment (42% versus 55%) will increase, while the stock market (18% versus 34%) and home values (10% versus 30%) will decrease in the coming year.

Coloring their outlook for 2006, large majorities of investors predict that the costs for daily expenses such as energy (86%), food (85%) and gasoline (84%) will be on the rise in the coming year. With this in mind, respondents said paying off debt (31%) and saving for retirement (24%) are the two most important financial goals for 2006.

With an eye on their wallets, nearly half (49%) of investors continue to feel that oil prices will increase, and almost seven in 10 (69%) have made some change in their spending behaviors or investment strategy as a result of energy prices. The South seems to be most effected by the current energy prices with 78 percent of southern respondents indicating they have made changes in their financial habits.

Looking to place blame, nearly half (47%) of shareholders think major oil companies are primarily responsible for the current energy prices, a finding that is more true in the Midwest (51%) and South (51%) than the East (44%) and West (41%).

Investors' View on the Real Estate Market

More than half of shareholders perceive real estate to be a good investment with 57 percent of respondents holding this view. Shareholders in the East and West regions feel strongest about real estate as a good investment with 61 percent of respondents from both of those areas holding this view. Only 47 percent of Midwest investors share this opinion.

While most investors (79%) think real estate is a good or better investment than a year ago, more than one-third (36%) think it will be worse a year from now - underlining investors' concerns about the volatility of the real estate market.

About the VOAS Poll

This VOAS poll was conducted online by Harris Interactive(R) between Oct. 12 and 24, 2005.

"With this survey, we are able to gain insight into what's on investors' minds and how they plan to approach the coming year," says Janke. "In today's ever-changing economy, individual investors are vital to a company's financial strength and, often, survival. It is more imperative than ever that individual investors understand their investments, how the market works and how to analyze companies. BetterInvesting's mission is to help individual investors achieve these goals."

BetterInvesting (formerly the National Association of Investors Corporation, NAIC), the world's largest nonprofit organization focused on investor education, sponsors the Voice of the American Shareholder poll. The poll was introduced in 2003 and is designed to track investing behavior, and provide insight into shareholders' attitudes and views on current topics that could affect their investment decisions. Participating in this quarter's survey were more than one thousand (1,006) owners of individual stocks or stock mutual funds, ages 18 or older, throughout the United States.

Go to http://www.better-investingnewsroom.org/voice/VoicVOAS-279.html for the complete results of the most recent BetterInvesting VOAS poll as well as previous waves of the survey.

Methodology

The Voice of the American Shareholder study was conducted online within the United States by Harris Interactive on behalf of BetterInvesting between October 12 and 24, 2005 among a nationwide cross section of 1,006 U.S. adults aged 18 or older who currently own individual stocks or stock mutual funds. Figures for age, sex, race, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

In theory, with probability samples of this size, one could say with 95 percent certainty that the results for the overall sample have a sampling error of plus or minus 3 percentage points. Sampling error for sub-samples is higher and varies. This online sample is not a probability sample.

About Harris Interactive(R)

Harris Interactive Inc. (http://www.harrisinteractive.com/), based in Rochester, New York, is the 13th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll(R) and for its pioneering leadership in the online market research industry. Long recognized by its clients for delivering insights that enable confident business decisions, the Company blends the science of innovative research with the art of strategic consulting to deliver knowledge that leads to measurable and enduring value.

About BetterInvesting

BetterInvesting is the brand identity of the National Association of Investors Corporation, a national, nonprofit corporation with members consisting of investment clubs and individual investors. Founded in 1951 and with headquarters in Madison Heights, Mich., BetterInvesting is considered the pioneer of the modern investment club movement, as well as the voice of the individual investor. BetterInvesting is dedicated to providing a sound program of investment education and information to help its members become successful long-term, lifetime investors. The BetterInvesting community currently consists of nearly 200,000 individual members, and nearly 20,000 investment clubs. On average, BetterInvesting members add a collective $130 million of new investment capital to their portfolios each month, and boast combined portfolio assets in excess of $117 billion. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/ or call toll-free (877) 275-6242. For additional BetterInvesting data and news releases, visit the Newsroom website at http://www.betterinvestingnewsroom.org/.

BetterInvesting

CONTACT: Michael Gross of Anne Klein & Associates, Inc.,+1-856-988-6560 ext. 16, mike@mail.akleinpr.com, for BetterInvesting

Web site: http://www.harrisinteractive.com/

Web site: http://www.betterinvesting.org/http://www.betterinvestingnewsroom.org/

Source: PRNewswire

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