What is the most widely owned stock across states? If you guessed Apple, you would be right. In that last survey, we simply ranked each stock by the number of owners in each state.
This time, we wished to understand the relative likelihood of ownership. Compared to the a stock’s ownership nationwide, do investors in a specific state own a particular stock at a higher or lower rate?
Doing so can reveal interesting patterns, e.g.:
- Massachusetts stockholders are 4X more likely to own Dunkin Donuts than those across the country. Nationwide, 0.5% of investors own DNKN. In Massachusetts, 2% own Dunkin stock.
- Yelp bubbles up as the most popular stock in California. Although many popular stocks such as TSLA, GOOGL, FB, AAPL, and LNKD are headquartered in the Golden state, they’re also widely owned by investors across the country. Hence, they don’t come up to the top in CA.
Using this metric, we map the top stock in each state.
Indexing ownership to the national average can tell us about home bias. Many of the favorite stocks are headquartered in the respective state: ShakeShack in NY, Under Armour in MD, Las Vegas Sands in NV, Dunkin Donuts in MA, Baker Hughes in TX, Yelp in CA, Tableau in WA, etc. Here is the same map, filtered only to headquarter states.
Below is an interactive map. Hover over the states to see their most popular stocks and their relative popularity. You can download the underlying data as well here.
Note: in our analysis, each stock is owned by at least 100 investors in our data.
In 2015, most individual investors lost money and underperformed the markets. 72% of investors had negative or zero 12-month return. (In 2014, 30% of investors did.) While the S&P 500 and a 60/40 balanced portfolio* had 12-month returns of 0.4% and -0.3% respectively, the median investor lost 2.6%.
Women investors outperformed men, but not by much. One possible factor could be that men turned over their portfolios 44% more than women.
In general, we consistently observe across all investors that higher portfolio turnover predicts poorer returns.
Portfolio turnover could reflect reacting to short-term volatility in the markets. During the August 2015 correction, investors who reacted the most by selling also had the worst returns.
Returns are net of fees and include dividends. Time period is 12 months ending 12/31/2015.
*For S&P 500, we used total returns from VTI. For 60/40 Balanced, we used VBINX.
Each year, we compile the most interesting trends in investor behavior we observed. For 2015, we share:
- A survey on performance: in a rough year for markets, how many everyday investors gained or lost money through the year? Did men or women have better returns? What was most correlated with better performance?
- A look at inequality: across retail investors who use SigFig, how is wealth distributed? Is inequality more or less pronounced among Baby Boomers or Millennials?
Read this year’s report, here.
(2014 is also available.)
We wish our readers a happy 2016.
It’s probably not news to any of us that wealth is not equally distributed. In fact, it’s highly skewed—but just how lopsided is it? For this quarter’s SigFig Insights report, the data team investigated the profile and behaviors of the most wealthy of investors and the least wealthy of investors.
According to findings, investors in the wealthiest quartile have on average 348 times more wealth than the average investor in the least wealthy quartile.
Other key comparisons and findings include:
- Top 50 percent versus bottom 50 percent: When comparing the top 50 percent of investors with the bottom 50 percent of investors, the top half owns 97 percent of the total wealth, with the bottom half owning the remaining 3 percent.
- Top 25 percent versus bottom 25 percent: On average, the bottom 25 percent of investors owns $4,600 in assets, while the top 25 percent owns $1.6 million.
- Top 1 percent versus median investor: On average, the top 1 percent of investors owns $12 million in assets, which is 145 times greater than the assets owned by the median investor ($83,000).
Not only do we see a gap in amount of wealth, the report also reveals differences in investment behavior. The wealthy, top 25 percent of investors tends to churn their portfolio less, pay lower fees, and handle market volatility better—all of which are factors that lead this group of investors to achieve higher portfolio performance. The top 25 percent of investors saw returns that were more than two times higher than the returns of the bottom 25 percent of investors.
Even among those with the means to invest, we see a surprisingly unequal balance of wealth and differences in investing behavior. While we may not know the exact reasons behind this divide, we do see that wealthier investors tend to practice sounder investment strategies, like avoiding unnecessary fees and staying put even when the market dips—strategies that can be employed by any investor.
You can read the full report here.
About the SigFig Insights Report
The analysis in this report is based on data aggregated and anonymized from 330,000 investors who have synced their portfolios with SigFig. Results are net of all management fees and expenses unless otherwise noted. Performance data includes reinvestment of dividends and interest unless otherwise noted. Past performance is not indicative of future returns. Direct comparisons between performance and equity market indices are not without complications. The indices may be unmanaged, may be market weighted, and unlike advisory clients, indices do not incur fees and expenses. Technical details are available upon request.
Many say one’s mobile phone choice says a lot about a person; so what does someone’s mobile phone preference say about them as an investor?
Recently, our data team looked at the investing behaviors of users behind different mobile phones—iOS, Android, and Windows. (Specifically, they examined 150,000 users of the SigFig app.)
In terms of portfolio returns, there was no real difference between users of these three devices, but we did see a difference in terms of assets. Given the high cost of an iPhone, perhaps it’s not surprising to see that the portfolio size of an iOS investors is two times the size of an Android or Windows user.
While it may seem iOS users would be most proud of their mobile choice given their portfolio size, it turns out that it is the Windows user who is the most loyal to the brand—with users being 3X more likely to own Microsoft shares.
Your mobile operating system does not actually impact your portfolio size or returns performance. Choosing an iPhone will not guarantee better investment results or a larger portfolio size. However, sound investment strategies tend to help investors put their best foot forward.
Summer is over. Kids are back in school. It’s time to start thinking about sweaters, pumpkins, and how the holidays will be here before you know it. There’s one more thing you should potentially add to the list: checking in on your 401(k).
Last year, we saw more than 30 percent of investors play catch-up and make last-minute contributions to their 401(k)s. These investors made 10 percent or more of their total contributions for the year in December. In comparison, if this same group of investors had saved and contributed an equal amount each month throughout the year, they would have only needed to make 8 percent of their total contributions each month.
Being late to the party is not necessarily a bad thing. There are plenty of possible strategies for 401(k) investors who want to boost their savings rate in the last few months of the year, and there are plenty of investors who could be saving more. Individuals can contribute a maximum of $18,000 to their 401(k) accounts this year, and investors at the age of 50 or over can make additional “catch-up” contributions of up to $6,000.
However, most investors are not on track to meet that maximum this year. In fact, only 39 percent of investors who track their portfolios with SigFig are on track to max out their contributions to their 401(k) accounts so far.
So who are these latecomers? By and large, younger investors.
Older investors are more likely to max out. Only about 1 in 5 investors under 30 are saving enough to hit $18,000 by the end of the year. Meanwhile, 44 percent of investors in their 30s and 58 percent of investors in their 40s are on track to max out their contributions.
Of course, there are plenty of reasons why younger investors might have trouble saving $18,000 over the course of a year. Younger investors are likely to be making less, and may be saving for other, more immediate goals, like a car or a house—or struggling to pay off student loans.
Unfortunately, delaying saving for retirement will have huge costs down the line. The math is firmly on the side of those who start saving early. If you manage to start saving when you’re 25, and you save $7,000 a year, you’ll have about $1.9 million when you hit retirement age. However, if you max out your 401(k) starting when you’re 25, you’ll end up with almost $5 million. Thanks to the power of compounding, those early dollars—the ones you cannot easily spare when you’re just starting out—are worth much more than any catch-up contributions you might make when you’re in your 50s.
There is still hope though. If, for example, you can’t save much during your 20s, but you start to ramp up your savings in your 30s, you could still end up with more than $3 million by the time you retire. Check out some of these other good reads for more tips around saving for retirement: