FINANCIAL ILLITERACY

This study was done in 1996 but bears witness to the fact that investor knowledge is still extremely lacking. The non profit Investor Protection Trust stated that "financial illiteracy is aggravated by the reckless behavior on the part of investors, two out of three of whom do not have a financial plan."

"This data suggests that millions of investors, particularly women and older investors, are sitting ducks for investment fraud and abuse. These are not encouraging findings for a society that is moving increasingly to a self serve approach to personal finance. Better informed decision making is going to be critically important as Americans find themselves confronted with more and more choices they must make about major money matters, such as the investment of retirement savings." Princeton Survey Research Associates said that "the study finds that less than one fifth of investors surveyed are truly literate about financial matters specifically related to investing. Most lack basic knowledge about the meaning of financial terms and about the way different investments work. The least knowledgeable investors are female, have not attended college and are age 65 and older".

Lastly, Barbara Roper of the Consumer Federation of America also said that "the appalling lack of basic financial knowledge revealed by this study calls into serious question the ability of Americans to make sound, informed financial decisions that would allow them to achieve those goals." Of the 1,001 families surveyed nationally, the following is noted. (I suggest that you look at the previous work on illiteracy overall, You will find that much info is almost correlated directly.)