The stock market can seem like a monumental, confusing thing. But it’s also become increasingly popular in recent years, especially among young people, with the advent of investment apps. People are investing for little money and seeing great results over time as they build a strong portfolio.
Ultimately, no matter how long you’ve been navigating it, a lot of people still don’t fully understand the stock market and how it all works. Gambler’s Pick wanted to get an idea of people’s knowledge of the stock market and how it’s navigated, so they conducted a survey of 1,006 individuals who’d invested at least once and asked them a variety of questions.
Survey Question: Top Stocks Invested In
First, respondents in the Gambler’s Pick survey were asked about their investments to get a sense of both the top stocks that were invested in over the past six months and the most popular cryptocurrencies among those surveyed. Perhaps unsurprisingly given their recent stock market controversy, GameStop was the top stock invested in among respondents (33%). They were followed by BlackBerry Ltd (NYSE:BB) (28%), Express, Inc. (NYSE:EXPR) (24%), AMC Entertainment Holdings Inc (NYSE:AMC) (23%), Nokia Oyj (NYSE:NOK) (23%), Clean Energy Fuels Corp (NASDAQ:CLNE) (18%), Virgin Galactic Holdings Inc (NYSE:SPCE) (18%), SoFi Technologies Inc (NASDAQ:SOFI) (18%), ContextLogic Inc (NASDAQ:WISH) (16%), Palantir Technologies Inc (NYSE:PLTR) (15%), Cleveland-Cliffs Inc (NYSE:CLF) (13%), and Clover Health Investments Corp (NASDAQ:CLOV) (8%).
Bitcoin was by far the most popular cryptocurrency among respondents (70%) with Litecoin (39%), Ethereum (37%), Ripple (34%), Dogecoin (22%) and Cardano (22%) following. The least popular cryptocurrencies were Binance (13%), Dash (13%), and Stellar (6%).
When it comes to investors’ self-assessed knowledge of the stock market, just 21.3% of respondents said their knowledge of the stock market was excellent. Most of the respondents said they had average knowledge (38.9%), while 31.5% labeled their knowledge as above average. Only 8.3% said their knowledge of the stock market was poor. People who said they had excellent knowledge of the stock market were more likely to invest in ContextLogic and Virgin Galactic.
Quiz Assessing The Knowledge Of The Stock Market
Following those questions, respondents were given a quiz to assess their actual knowledge of the stock market. That 15-question quiz showed a range of results, and Gambler’s Pick broke down the scores by different factors including crypto ownership, how seriously respondents took the stock market, their generation, and more.
Overall, the average score on the quiz was 49%, or a grade of F on a scale that graded anything under 65% as a fail. The average score by gender was 50.4% for men and 51.4% for women, while the average score for those who owned cryptocurrency was 44.8% and those who did not was 63.5%.
The average score among respondents who claimed not to take the stock market seriously at all was 54%, followed by those who said they regard it fairly seriously (52.3%), seriously (50.7%), and very seriously (48.3%). Generally, 14.8% of people said they either didn’t take the stock market seriously at all or only slightly seriously.
When it came to respondents’ self-assessed knowledge of the stock market, the average quiz scores were notable. The average score among those who felt they had excellent knowledge of the stock market was 39.5%, while those who felt they had either an average or above-average knowledge averaged 53.7% on the quiz, and those who said they had a below-average or very poor knowledge of the stock market averaged 55.6%.
The quiz also resulted in a lot of the same questions being answered incorrectly, which is interesting given respondents’ actual and perceived knowledge of the stock market. Eighty-three percent of respondents missed the question, “Which of the following is true of the phrase ‘short-selling,’” while 73% incorrectly completed the phrase, “GME is the ___ for GameStop.” Nearly two-thirds missed the question, “What do the ‘ask’ and the ‘bid’ mean,” while 57% were incorrect when asked to “Select the definitions for hedge fund, mutual fund, and exchange fund.”
Among the 95% answering the aforementioned questions about short selling incorrectly, 81% of those with an average self-assessed knowledge of the stock market answered it wrong; as did 80% of those with an above-average self-assessed knowledge; and 74% of those deeming their market knowledge as poor or below-average.
Three-quarters of those who credited themselves with having an excellent self-assessed knowledge of the stock market incorrectly answered the question mentioned about GameStop, which is especially interesting given the company’s recent newsworthy stock frenzy.
Overall, given the quiz results, it seems that an overwhelming number of respondents don’t know nearly as much about the stock market as they might have assumed. If this says anything, it’s that people should prioritize education and understanding of something as serious and life-altering as the stock market before they start investing in it – no matter how big or small the investment may be. It’s a complicated, often confusing thing, but a little knowledge can undoubtedly go a very long way.
Article By Sean Kelly