Investors lack basic financial literacy, study finds
Investors in the US are flying blind, according to a new report. Many fail to grasp compound interest, don鈥檛 understand fees and other investment costs, and aren鈥檛 aware about the risks of investment fraud.
Investors in the US are flying blind, according to a new report. Many fail to grasp compound interest, don鈥檛 understand fees and other investment costs, and aren鈥檛 aware about the risks of investment fraud.
鈥淎merican聽investors lack basic financial literacy,鈥� according to a new聽report from the Securities and Exchange Commission (much of which is based on an earlier report by the Congressional Research Service at the Library of Congress).聽Many fail to聽grasp compound interest,聽don鈥檛 understand fees and聽other investment costs, and聽aren鈥檛聽aware about the risks of investment fraud.
From the report summary:
The report goes on to discuss ideas for increasing financial literacy and increasing the transparency of fees and other investment costs.
People聽sometimes talk about financial literacy as though the goal is helping people choose their own investments. That can be helpful, but the report rightly聽discusses another goal:聽improving consumers鈥� ability to聽work with聽financial advisers.