Like other investments, bonds are having a hard time attracting the public, according to the American Capital Index of investor Intentions. This month's survey found that 40.7% of Americans believe the next 60 to 90 days is a "good time" to invest, down from 43.6% in September. Asked what they would do with $10,000 to invest, 32.2% of respondents said they would put the money in savings, up from 30.4%. Those choosing mutual funds fell to 19.2% from 21.9% in September. Those favoring bonds fell to 7.6% from 8.2%.
Overall, the index declined for the fourth straight month, dropping to 210 from 220 in September. When focused on self-described "knowledgeable" investors; the index plunged to 338 from 404 in the previous month, marking the single largest percentage decline for that sector since the survey began in November 1993.
"We believe 'knowledgeable' investors are reacting negatively to the uncertain financial markets, including the prospect of rising interest rates and greater inflation," said Donald A. McMullen Jr., president of American Capital Management & Research.
The last decline among "knowledgeable" investors was in April, which coincided with a stock market drop of 300 points, he said.
-- Sharon R. King, New York City