Voice of the American Shareholder Quarterly Poll Wave 6

Prepared for:BetterInvesting

Final ReportJune 8, 2005

Table of ContentsStudy Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Overview of Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Detailed Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14What Does A Typical Shareholder Look Like, and How do they Behave?. . . . . . . . . . . . . . . . . . . 15How Do Shareholders Feel about the Economy and Stock Market? . . . . . . . . . . . . . . . . . . . . . . .23How Do Shareholders Feel about Second Half of 2005?.................. . . . . . . . . . . . . . . . . . . . . . . .40What Do Shareholders Feel about Investing in the Global Marketplace? . . . . . . . . . . . . . . . . . . . . 46How Do Shareholders Feel about Investing in the Chinese Market? . . . . . . . . . . . . . . . . . . . 69How Do Shareholders View the European Union and the US Market?. . . . . . . . . . . . . . . . . . . . . . .82Demographics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Detailed Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93

Study ObjectivesBetterInvesting commissioned Harris Interactive to conduct a series of research studies to better understand the attitudes and behaviors of American investors. This study represents the sixth wave of research conducted for BetterInvesting. The previous waves were conducted in September 2003, January 2004, May 2004, November 2004, and February 2005.By regularly reporting on these findings, BetterInvesting expects to capture the voice of the American shareholder. The survey questions are designed to measure a few key trends in shareholders portfolios and investing behavior as well as to understand shareholders attitudes and views toward current issues. Specifically, this wave of research focused on the following topics:Investment profile, goals, strategy, and future plans;Views toward the stock market and outlook for the second half of 2005;Perceptions of international markets including reasons for and against investing in the growing Chinese market; and,Views toward the European Union and the U.S. marketplace.

Overview of MethodologySample includes 1,002 shareholders defined as U.S. adults aged 18 or older who currently own individual stocks or stock mutual funds.Interviewing was conducted between April 26 - May 6, 2005.The interview averaged 10 minutes in length.All interviewing was conducted online using the Harris Poll Online (HPOL) database consisting of several million members who have agreed to participate in survey research.

Executive Summary

Current Investment EnvironmentThe typical American investor continues to be somewhat cautious in todays marketplace. However, they are in it for the long term and recognize that stocks can yield the greatest returns.In each wave of data, the majority of investors indicate that they plan to make no changes to their portfolios in the near future (the next six months). The average risk level of investors portfolios is steady at about 4 on a 7 point scale where 1 is not at all risky and 7 is very risky. When asked, how they would invest either $10,000 or $100,000, half indicate that they would put that money in either individual stocks or stock mutual funds. Investors overall level of confidence in the economy and stock market continues to wane.The NAIC Investor Confidence Index has declined again to its lowest level at +5.0 from a high of +19.3 in January 2004.There is a great deal of fluctuation in the components that make up the Index and the data shows that investors are increasingly thinking that its a good time to move into safer investments.Belief that the overall direction of the US economy is going in the right direction has declined to its lowest level since measurement began. Less than half (49%) think the economy is headed in the right direction. Since February women have shown a considerable drop in confidence in the US economy.Mens views of the economy are consistent since November 2004.Half of men still feel that its a good time for new investors to get involved in the stock market. In comparison, the proportion of female shareholders who feel this way has decreased since February (40% vs. 50%).The proportion of men who feel that its a good time to move into safer investments has steadily increased from a low of 29% in January 2004 to 46% in May 2005. Women, on the other hand, have increased in their agreement of this statement (rising from 44% to 49% today).

Views toward the economy and stock marketShareholders confidence in the direction of the U.S. economy continues to fall, reaching its lowest levels in this series of research.When asked about confidence in the United States economy, 49% of shareholders indicate that they have a fair amount or a great deal of confidence that it is moving in the right direction down from 55% in February 2005 and a high of 71% in January 2004.Women (40%) have significantly less confidence than do men (55% a great deal/fair amount).Despite the fact that many shareholders have not made changes to their portfolios, they are lukewarm in their overall view of the market.Fewer than half of shareholders (45%) believe its a good time for new investors to get involved in the stock market, down from 50% in February 2005 and a high of 62% in January 2004. Agreement that most stocks are a better bargain now than they were a year ago has risen by eight percentage points (37% now versus 29% in February 2005).However, shareholders increasingly agree that its a good time to move money into safer, lower risk investments from higher return/higher risk investments, with 47% who now hold this view.Male and female shareholders are showing similar levels of agreement (46% of males versus 49% of females).The proportion who agree that its a good time to move money into less risky investments has steadily increased since January 2004.

Views toward the economy and stock marketThe BetterInvesting Shareholder Confidence Index has dropped again from +7.8 in February 2005 to +5.0 today. Currently the BetterInvesting Index is +5.0, down from +19.3 in January 2004. On a scale from -100 to +100 (where zero indicates a neutral attitude towards the stock market), an Index of +5.0 shows trace levels of optimism tempered by concern about the direction of the economy.

Men(+8.6) are more confident than women (-0.4) and confidence declines with age.

Among those 65 and older, the index is -4.9.

The Index has also decreased by region with those in the West (-2.0) currently having the most negative view of the stock market.

Outlook for Second Half of 2005Despite lower levels of confidence and concerns about the economy, the majority of shareholders think the market will stay the same or improve in the second half of 2005.One in five (21%) think the market will worsen.Men are more optimistic than women with 42% believing the market will improve.Investors continue to think that the best industries to invest in are real estate, pharmaceutical and technology.Roughly the same proportion of investors consider these among the best investments now as they did in November 2004.There has been more fluctuation among industries considered poor investments.Automotive now tops the list of the worst industries to invest in followed by travel and education, which were both viewed differently in November.More than half of shareholders feel that oil prices will continue to increase and they most commonly mention international politics as the primary reason.

Perceptions of the Global MarketShareholders agree that international investments will be important in the future and are part of a diversified portfolio.Shareholders residing in the West feel that international investments will be important in the future (65%), used to guard against a weak economy (53%) and tend to yield larger returns (45%).Just one-third (33%) feel comfortable making international investments.Further, majorities of shareholders feel that the declining value of the US dollar, outsourcing, strong economic growth abroad, high oil prices and slow domestic economic growth have at least somewhat contributed to international funds outperforming domestic US funds. Female shareholders tend to attribute this trend to US companies moving operations overseas (89%), slow economic growth (87%) and high oil prices (85%) than males (81%, 75%, and 78% respectively).Overall, shareholders still have the majority of their investments within the US. However, they indicate their plan to increase their investments in international markets. Those who are under the age of 35 indicate they will have a higher percentage of international investments in the next five years.Nearly half (45%) have no international investments and are fully invested in domestic markets.When it comes to investing internationally, there is a greater likelihood of shareholders investing in individual stocks in US based companies with a global presence than shares in international stock funds, individual stocks in foreign based companies, and shares in international bond funds.Shareholders who indicate they are comfortable with international investments are significantly more likely to diversify their foreign investments through shares in international stock funds (37%), US based companies with a global presence (24%), and shares in international bond funds (21%) than those who are less comfortable.

Perceptions of the Global MarketInvestors have mixed views about the impact foreign economies will have on the United States.Fewer than half think any economy examined in the survey (Russia, China, Japan, India and the European Union) will have a positive impact on the US economy, though current international investors are more likely to perceive a positive impact.China is viewed most negatively; 50% of shareholders think China will have a negative impact on the US economy.India, China and especially Russia are viewed as risky investments by majorities of shareholders.On average, Japan and the European Union are rated about as risky as investors current portfolio (roughly 4 on a 7 point scale where 7 is very risky).Interestingly, current international investors are more likely to think investments in each of these areas are risky as compared to those fully invested in domestic markets.Majorities of investors report that they are not likely to invest in the countries or regions explored in the survey.Between 61% (Russia) and 90% (Russia) are not likely to invest in these international markets (69% China, 65% Japan and 75% India).Women are even less likely than men to invest in these areas as are those 65 and older.

Feelings About the Marketplace in ChinaAlthough one half of shareholders say they do not plan to invest in China, a third say they are taking the wait and see approach before they decide to invest.Nearly six in ten shareholders say the largest barrier to invest in China is lack of confidence in the communist government. Three in ten feel that human rights violations and corporate/government corruption are deterrents. Current international investors are more likely to cite human rights violations (36%) as an obstacle to investing in the Chinese economy, while non-international investors are deterred by corporate and government corruption (34%).In order to understand possible motivators to investing in the Chinese market, shareholders were asked to identify the biggest opportunities in that market. Half of shareholders view the supply of workers (50%) and the fast growing economy (48%) as the top opportunities in the market.The fast growing economy (56%) is key for current international investors.When looking at the various industries, manufacturing (59%) is considered by far the best investment in the Chinese market.The perceived worst industry segments in which to invest include health care (36%), real estate (29%), insurance (28%) and media (25%).While men view banking and finance as among the worst industries (28% vs. 14% females), women are more likely to mention the automotive industry (22% vs. 12%).

Views of the US and European Union MarketsWhen evaluating the impact of EUs economy on the US economy, most shareholders do not view the EUs economy as a threat.Among younger shareholders, there is less of a likelihood of viewing the European Unions economy as a threat to the US.In order to understand the advantages of each market, shareholders were asked to evaluate which market has the advantage on a number of factors. Real estate, productivity, and supply of workers are viewed as US advantages. Conversely, shareholders feel the EU has an advantage when it comes to social programs and healthcare/retirement.Females see the advantages of the EU market as healthcare/retirement (63% vs 54% males), effects of government regulations (52% vs. 43%), and productivity (40% vs. 24%).On the other hand, males feel the US economy has the lead on productivity (76% vs. 60%), effects of government regulations (57% vs. 48%) and healthcare/retirement (46% vs. 37%).

Detailed Findings

What Does the Typical American Shareholder Look Like, and How Do They Behave?

The typical investor has more money invested in stock mutual funds than individual stocks.Total Amount Invested in Individual Stocks and Stock Mutual FundsQ1441: You mentioned that you have the following investments. About how much do you have invested in the following?Base: All Shareholders

Individual Stocks (%)Stock Mutual Funds (%)Jan 04May 04Nov 04Feb 05May 05Jan 04May 04Nov 04Feb 05May 05Less than $5,00041413642293032253019$5,000 - $9,9991091298810657$10,000 - $49,99920282025242931253223$50,000 - $99,999976710911131416More than $100,00019151317232416151825MEAN$108,900$64,200$63,400$156,200$146,200$84,100$56,300$67,900$94,400$103,000MEDIAN$7,000$8,350$5,700$8,700$14,000$19,000$14,640$16,160$17,400$35,000

Q430: Please indicate which types of investments or investment accounts you personally have. Do you currently have . . .?Base: All shareholdersShareholders maintain a wide variety of investments.Types of Investments Owned

Jan 04May 04Nov 04Feb 05May 05%%%%%Individual stocks (not including stock options or restricted stocks from the company that I work for)7167666769Stock mutual funds6770697269Individual retirement account that I control (i.e., IRA, KEOGH, SEP)5651525956Individual retirement accounts through my employer (i.e., 401(k) retirement savings plan or 403(b) retirement savings plan, or profit sharing plan)5252505151Bonds or bond funds3335353736Stock options or restricted stocks from the company that I work for1517121215Other type of investment not mentioned2121252526

Q510: Again thinking about your investment portfolio, over the next six months, do you plan to increase, decrease or make no change in your investments in each of the following? Base: All shareholdersFor the most part, shareholders plan to make no changes to their investments over the next six months.Plans for Investments Over The Next Six Months

Increase (%)Make No Change (%)Decrease (%)200420052004200520042005JanMayNovFebMayJanMayNovFebMayJanMayNovFebMayIndividual stocks 3426292825626763646757888Stock mutual funds 3124242823647169686955748Individual bonds 688811898885878453655Bond mutual funds 1011111112848483858355635Cash 393838354052545255529810108Alternative investments 85788909289888722445Other investments not mentioned 1516151517838181828123333

Q510: Again thinking about your investment portfolio, over the next six months, do you plan to increase, decrease or make no change in your investments in each of the following? Base: All shareholders (n=1,002; Male=547; Female=455)Three in ten men plan to increase their investment in individual stocks and one in seven plan to increase their investment in bond mutual funds compared to only 19% and 8% of women respectively.Plan to Increase Investments Over The Next Six Months By Gender

Increase (%)TotalMaleFemaleIndividual stocks 253019Stock mutual funds 232520Individual bonds 11129Bond mutual funds 12158Cash 404336Alternative investments (such as hedge funds, private equity and managed futures)896Other investments not mentioned 171716

Whether they have $10,000 or $100,000 to invest, shareholders would continue to invest half in stock mutual funds and individual stocks.Percentage Allocated to Each InvestmentQ515: If you had $10,000/$100,000 to invest, how much would you invest in each of the following? Base: All shareholdersNote: For this question, half of all respondents were asked to allocate $10,000 across the investments listed above and the other half were asked to allocate $100,000 across the investments listed above.

Q505: Investment risk is typically defined as a greater likelihood that your portfolio may lose value but is often associated with higher returns. On a scale from 1 to 7, in which 1 represents not risky at all and a 7 represents very risky, how would you characterize most of your investments?Base: All shareholdersRisk Level of Current Investments Sept 03Jan 04May 04Nov 04 Feb 05 Feb 05MEAN = 4.04.13.93.93.9 4.0Shareholders investments are a mix of risk levels but, on average, are moderately risky.

Q505: How would you characterize most of your investments on a scale from not risky at all to very risky? Base: All shareholders Risk Level of Current Investments By GenderFour in ten male shareholders characterize their investments as risky while just 3 in 10 female shareholders do the same.

Sept 03Jan 04May 04Nov 04Feb 05May 05%%%%%%Very Risky (5, 6, 7) (Net)363835343436Men424541434040Women272827242730Moderately Risky (4)303228313230Men292826283028Women313832353532Not Risky at All (1, 2, 3) (Net)333037343434Men282733293032Women413341413933Mean4.04.13.93.93.94.0Men4.24.24.04.24.14.0Women3.73.93.83.63.73.8

How Do Shareholders Feel about the Economy and Stock Market?

Confidence in the U.S. economy has fallen in the past couple of months to its lowest level since the survey began. Q410: How much confidence do you have that the United States economy is generally moving in the right direction?Base: All shareholdersConfidence in the U.S. Economy

Female shareholders have less confidence that the U.S. economy is moving in the right direction, falling 13% since February.Q410: How much confidence do you have that the United States economy is generally moving in the right direction?Base: All shareholdersConfidence in U.S. Economy By Gender - A Great Deal/Fair Amount (Net)MenWomenTotal

Q501: How strongly do you agree or disagree with each of the following statements? Base: All shareholdersFor the first time since January 2004, fewer than half of shareholders think its a good time for new investors to get involved in the stock market and three in ten disagree.Its a good time for new investors to get involved in the stock market.

Consistent with womens views about the direction of the economy, they are also less likely than men to think it is a good time for new investors to get involved in the stock market.Q502: How strongly do you agree or disagree with each of the following statements?Base: All shareholders% Strongly/Somewhat Agree:Its a good time for new investors to get involved in the stock market.

Agreement has shifted in the past couple of months, with more agreeing today that stocks are a better bargain than one year ago.Most stocks are a better bargain now than they were one year ago.Q502: How strongly do you agree or disagree with each of the following statements?Base: All shareholders

Male and female shareholders are equally likely to agree that stocks are a better bargain now than they are likely to a year ago.%Strongly/Somewhat Agree:Most stocks are a better bargain now than they were one year ago.Q502: How strongly do you agree or disagree with each of the following statements?Base: All shareholders

Q501: How strongly do you agree or disagree with each of the following statements? Base: All shareholdersThe proportion of shareholders who agree that its a good time to move money into safer investments has continued to increase, with nearly half of shareholders now holding this belief.Its a good time to move money into safer, lower risk investments from higher return/higher risk investments.

Male and female shareholders again equally agree that its a good time to move money into lower risk investments.% Strongly/Somewhat Agree:Its a good time to move money into safer, lower risk investments from higher return/higher risk investments.Q502: How strongly do you agree or disagree with each of the following statements?Base: All shareholders

May 2005BetterInvesting INDEX+5.0The BetterInvesting Index of Shareholder Confidence continues to fall, dropping to + 5.0. May 2005Component Scores for Each Item Included in BetterInvesting IndexNote: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.

The BetterInvesting Index of Shareholder Confidence has declined significantly for women since February 2005 to -0.4 today. The Index for men has remained steady since February.Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.FemaleMale

Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.May 2005Component Scores by GenderThe BetterInvesting Index of Shareholder Confidence is much higher for male shareholders.

Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.Index Scores by Age GroupsThe Index decreases with age and indicates a negative view of the market for older shareholders.

Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.May 2005Component Scores by Age GroupsThe BetterInvesting Index of Shareholder Confidence declines with age.

Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.Index Scores by RegionThe Index has declined among Western region residents, but risen among those in the Midwest.

Note: The BetterInvesting Index was calculated based on 7 components that reflect shareholder confidence in the economy and stock market and is rated on a scale from -100 to +100 where 0 is the midpoint. A more detailed explanation of the Index is found in the Detailed Methodology.May 2005Component Scores by RegionThe BetterInvesting Index of Shareholder Confidence is highest among residents of the Midwest and South.

The majority of shareholders say they do not benchmark their investments against the S & P 500 index. A quarter of shareholders say they rely a great deal or somewhat on the stock market indexes to make decisions.Q715: How much do you rely on stock market indexes to make decisions about your investment strategy? Q720: Do you benchmark your investments against the S & P 500 Index? Base: All shareholders (n=1,002)Benchmarking to S & P 500 IndexReliance on stock market indexes

What do Shareholders think aboutthe Second Half of 2005?

A third of shareholders are optimistic and see the market improving in the second half of 2005.Q700: Thinking of the second half of 2005, how do you think the market will perform? Base: All shareholders (n=1,002)

Men are more likely than women to think the market will improve in the second half of 2005.Q700: Thinking of the second half of 2005, how do you think the market will perform?Base: All shareholders (n=1,002)

Similar to investors outlook in November 2004, they think that the best investments for the second half of 2005 include real estate, pharmaceuticals, and technology. Q705: Thinking of the current economy, please indicate which three of the following industries you think are the best for investing for the second half of 2005. Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Best Investments For the Second Half of 2005 Top 3 Best Industries Top 10 Mentions

When thinking about the worst industries in which to invest in the second half of 2005, the automotive industry tops all, which is a significant increase from November 2004.Q710: Once again, thinking of the current economy, please indicate which three of the following industries you think are the worst for investing for the second half of 2005. Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Worst Investments For the Second Half of 2005 Top 3 Worst Industries Top 10 Mentions

More than half of shareholders expect a continued increase in oil prices. The most common reason cited for high oil prices is international politics.Q635: Do you expect oil prices to continue to increase, level off or decrease?Q640: Which of the following best describes why you think oil prices are at their current levels?Base: All shareholders (n=1,002)

What do Shareholders think aboutInvesting in a Global Marketplace?

The majority of shareholders have most of their portfolio in domestic markets but plan to increase their investment in international markets slightly.Q600: Please indicate the actual or expected percentage of your portfolio in the following types of investment markets for each time frame below. Base: All shareholders (n=1,002)

Proportion of Domestic vs. International InvestmentsMean % Currently % 0 International Investments 45%% 100% Domestic investments 45%

Women are more likely to have had a higher percentage of international investments in the past than men. That gap persists through to their projected percentage in five years.Q600: Please indicate the actual or expected percentage of your portfolio in the following types of investment markets for each time frame below. Base: All shareholders (n=1,002)

Proportion of International Investments by GenderMean %

While investors of all ages expect to increase their percentage of international investments, younger shareholders anticipate that international investments will comprise nearly of their portfolio.Q600: Please indicate the actual or expected percentage of your portfolio in the following types of investment markets for each time frame below. Base: All shareholders (n=1,002)

Proportion of International Investments by AgeMean %

Shareholders agree that international investments will be important in the future and are part of a diversified portfolio. However, just one third feel comfortable making these investments.Q645: Please indicate your level of agreement or disagreement with the following statements about international investments.Base: All shareholders (n=1,002)

Attitudes Towards International Investments

Men are more likely than women to agree that international investments are part of a diversified portfolio and that they are comfortable making these investments. Q645: Please indicate your level of agreement or disagreement with the following statements about international investments.Base: All shareholders (n=1,002)

Attitudes Towards International Investments By Gender%Strongly/Somewhat Agree

Those under the age of 50 are more likely to agree that international investments guard against a weak US economy, and say they are comfortable with international investments.Q645: Please indicate your level of agreement or disagreement with the following statements about international investments.Base: All shareholders (n=1,002)

Attitudes Toward International Investments By Age% Strongly/Somewhat Agree

Those in the West agree international investments will be important in the future, used to guard against a weak US economy, and yield larger returns.Q645: Please indicate your level of agreement or disagreement with the following statements about international investments.Base: All shareholders (n=1,002)

Attitudes Toward International Investments By Region% Strongly/Somewhat Agree

Shareholders are most likely to invest in individual stocks in US based companies with a global presence. However, nearly two-thirds indicate they are not likely to invest in individual stocks in foreign companies or international bond funds.Q605: Thinking about the international investments that you have or expect to make in the future, how likely are you to make these investments through the following vehicles? Base: Currently have or expect to have international investments (n=580)

Likelihood of Making Various Kinds of International Investments

Those who are comfortable with international investments are not surprisingly more likely to make international investments through all these investment vehicles.Q605: Thinking about the international investments that you have or expect to make in the future, how likely are you to make these investments through the following vehicles? Base: Currently have or expect to have international investments (n=580)

Likelihood of Making Various Kinds of International Investments By Comfort Level with International Investments% Extremely/Very Likely

US companies moving operations oversees and the declining value of the US dollar are viewed as the most contributing factors for why international funds have recently begun to outperform domestic funds.Q630: Some data suggests that international funds have recently begun to outperform domestic U.S. funds. How much do you think each of the following contributes to this? Base: All shareholders (n=1,002)

Reasons Why International Funds Outperform US Funds

Women are more likely than men to attribute the shift in international fund performance to slow economic growth in the US, high oil prices, and US companies moving operations overseas.Q630: Some data suggests that international funds have recently begun to outperform domestic U.S. funds. How much do you think each of the following contributes to this? Base: All shareholders (n=1,002)

Reasons Why International Funds Outperform US Funds By Gender% A lot/Some Contribution

Majorities of investors report that they are not likely to invest in Europe, China, Japan or India, and especially in Russia.Q610: How likely are you to invest in the following regions or countries? Base: All shareholders (n=1,002)Likelihood of Investing in Specific Regions or Countries

Women are far less likely to say they will invest in India, China, Japan or the European Union. There are no gender differences in likelihood to invest in Russia.Q610: How likely are you to invest in the following regions or countries? Base: All shareholders (n=1,002)Likelihood of Investing in Specific Regions or Countries By Gender% Somewhat/Not at All Likely

Older investors are the least likely to invest in Russia, China, Japan or the European Union.Q610: How likely are you to invest in the following regions or countries? Base: All shareholders (n=1,002)Likelihood of Investing in Specific Regions or Countries By Age% Somewhat/Not at All Likely

Investors have mixed views about the impact of Japan and the European Union on the US economy. Conversely, half of investors feel China will have a negative impact on the US economy. Q620: In the long run, do you think the following economies will have a positive or negative impact on the United States economy?Base: All shareholders (n=1,002)Impact of Other Economies on the US Economy

Current international investors are more likely to feel these countries will have a positive impact on the US economy. Q620: In the long run, do you think the following economies will have a positive or negative impact on the United States economy?Base: All shareholders (n=1,002)Impact of Other Economies on the US Economy By International Investors% Very/Somewhat Positive

Non-international investors are more likely to perceive a negative impact on the US economy from these foreign economies. Q620: In the long run, do you think the following economies will have a positive or negative impact on the United States economy?Base: All shareholders (n=1,002)Impact of Other Economies on the US Economy By International Investors% Very/Somewhat Negative

Most do not see the European Union or Japanese markets as very risky investments, however Russia is viewed as the riskiest investment.Q625: Regardless of where you may invest or the risk level of your investments, please indicate your current view about the risk level of domestic and international markets. Please use a scale of 1 to 7 in which 1 represents not risky at all and 7 represents very risky.Base: All shareholders (n=1,002) Risk Level of International InvestmentsMean ScoresRussiaChinaIndiaJapanEU 5.7 4.8 4.8 3.83.8

Men are more likely to see Russia as risky, while women view Japan as riskier than men.Q625: Regardless of where you may invest or the risk level of your investments, please indicate your current view about the risk level of domestic and international markets. Please use a scale of 1 to 7 in which 1 represents not risky at all and 7 represents very risky. Base: All shareholders (n=1,002)

Risk Level of International Investments By Gender% Very Risky (5, 6, 7 Net)

Investors age 65+ are more likely to categorize Japan and the European Union as risky investments than those under 65.Q625: Regardless of where you may invest or the risk level of your investments, please indicate your current view about the risk level of domestic and international markets. Please use a scale of 1 to 7 in which 1 represents not risky at all and 7 represents very risky. Base: All shareholders (n=1,002)

Risk Level of International Investments By Age% Very Risky (5, 6, 7 Net)

While Russia is seen as a risky investment among large majorities of investors, this is particularly true among those who say they are comfortable with international investments.Q625: Regardless of where you may invest or the risk level of your investments, please indicate your current view about the risk level of domestic and international markets. Please use a scale of 1 to 7 in which 1 represents not risky at all and 7 represents very risky. Base: All shareholders (n=1,002)

Risk Level of International Investments By Comfort Level% Very Risky (5, 6, 7 Net)

Among non-international investors all countries are seen as more risky compared to current intl investors.Q625: Regardless of where you may invest or the risk level of your investments, please indicate your current view about the risk level of domestic and international markets. Please use a scale of 1 to 7 in which 1 represents not risky at all and 7 represents very risky. Base: All shareholders (n=1,002)

Risk Level of International Investments By International Investors% Very Risky (5, 6, 7 Net)

How do Shareholders Feel About Investing in the Chinese Market?

Although half of shareholders say they do not plan to invest in China, a third indicate they are taking the wait and see approach.Q680: Which of the following best describes your current belief as it relates to investing in China? Base: All shareholders (n=1,002)

I do not plan to invest in ChinaI am taking a wait and see approachI am planning to invest in China in the next 2-3 yearsI am already investing in China and will continue to do soCurrent Investment in China

The largest barrier to investing in China is the lack of confidence in the communist government, followed by human rights violations and corporate and government corruption.Q650: Now we have a few questions specifically about the Chinese economy. Which of the following do you see as the biggest obstacles to investing in China? Please select up to two responses. Base: All shareholders (n=1,002)Obstacles to Investing In China

Females are more likely to see human rights violations as an obstacle, while men are more likely to see Chinas lack of a strong financial system as a barrier.Q650: Now we have a few questions specifically about the Chinese economy. Which of the following do you see as the biggest obstacles to investing in China? Please select up to two responses. Base: All shareholders (n=1,002)Obstacles to Investing In China By Current International Investors By Gender

While there is agreement that lack of confidence in communism is the primary obstacle to investing in China, current international investors are more concerned about corporate/government corruption, while non-international investors are concerned about human rights violations.Q650: Now we have a few questions specifically about the Chinese economy. Which of the following do you see as the biggest obstacles to investing in China? Please select up to two responses. Base: All shareholders (n=1,002)Obstacles to Investing In China By Current International Investors

Despite the barriers, shareholders see the biggest opportunities as the supply of workers, a fast growing economy, and outsourcing of manufacturing to China.Q660: Which of the following do you see as the biggest opportunities as it relates to investing in China? Please select up to two responsesBase: All shareholders (n=1,002)

Opportunities to Invest in China

Men are more likely to see Chinas fast growing economy as an opportunity for investing than women.Q660: Which of the following do you see as the biggest opportunities as it relates to investing in China? Please select up to two responsesBase: All shareholders (n=1,002)

Opportunities to Invest in China By Gender

The fast growing economy is key for current international investors.Q660: Which of the following do you see as the biggest opportunities as it relates to investing in China? Please select up to two responsesBase: All shareholders (n=1,002)

Opportunities to Invest in China By Current International Investors

By far, manufacturing is considered the best investment in the Chinese economy. Q670: Which segments of the Chinese economy do you see as the best investments? Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Best Investments in China Top 3 Best IndustriesTop 10 Mentions

Women are more likely to say technology is one the best segments of the Chinese economy to invest in, while male shareholders are more likely to see the automotive industry as among the best investments.Q670: Which segments of the Chinese economy do you see as the best investments? Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Best Investments in China Top 3 Best Industries By GenderTop 10 Mentions

Current intl investors are more likely to see the telecommunications industry as one of the best. However, non-international investors are more likely to think technology and travel are among the best industries.Q670: Which segments of the Chinese economy do you see as the best investments? Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Best Investments in China Top 3 Best Industries By International InvestorsTop 10 Mentions

Health care, real estate, insurance and media are viewed as the worst segments of the Chinese economy in which to invest.Q675: Which segments of the Chinese economy do you see as the worst investments? Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Worst Investments in China Top 3 Worst Industries Top 10 Mentions

While there is general agreement about the worst investments, men are more likely to think that media and banking/finance are among the worst investments. For women, automotive is among the worst.Q670: Which segments of the Chinese economy do you see as the best investments? Please indicate your first choice, second choice and third choice. Base: All shareholders (n=1,002)

Worst Investments in China Top 3 Worst Industries By GenderTop 10 Mentions

How do Shareholders View the European Union and US Markets?

Most shareholders do not perceive the European Unions economy as being a threat to the US economy.Q685: To what degree do you see the European Unions economy as a threat to the United States economy? Base: All shareholders (n=1,002)

62% A Little/ Not at All38%Great Deal/ SomewhatEUs Degree of Threat to US Economy

As age increases so does the belief that the EU economy poses a threat to the US economy. Younger shareholders are least likely to believe this. Q685: To what degree do you see the European Unions economy as a threat to the United States economy? Base: All shareholders (n=1,002)

EUs Degree of Threat to US Economy By Age

As compared to the EU, shareholders feel the US economy has the advantages of real estate values, productivity and supply of workers. On the other hand the European Union has the advantage of social programs and healthcare.Q690: Please indicate which economy you currently think has the advantage given each of the following factors. Base: All shareholders (n=1,002)Economic Advantage US vs. EU

Women are more likely to feel the EU economy has an advantage over the US economy with regards to productivity, effects of govt regulation, and healthcare/retirement.Q690: Please indicate which economy you currently think has the advantage given each of the following factors. Base: All shareholders (n=1,002)

Economic Advantage by Gender% European Union

Men, however, are more likely to feel the US economy has an advantage over the EU economy with regards to productivity, effects of govt regulation, and healthcare/retirement.Q690: Please indicate which economy you currently think has the advantage given each of the following factors.Base: All shareholders (n=1,002) Economic Advantage by Gender% United States

Demographics

Shareholder DemographicsGenderTotal%Male60Female40AgeTotal%35 years old or less2336-492950-642765+22MEAN49.4Marital StatusTotal%Single, never married16Married64Divorced10Separated1Widowed5Living with partner4Children in Household Under 18Total%0711152103+4MEAN0.5Race/EthnicityTotal%White79Black/African-American8Asian or Pacific Islander2Native American or Alaskan Native*Mixed racial background1Other race*Hispanic8Decline to answer2

Shareholder Demographics (Contd)EducationTotal%High school graduate or less27Some college28College (e.g., B.A., B.S.)33Graduate school (e.g., M.S., M.D., Ph.D.)12Party IdentificationTotal%Republican37Democrat31Independent32Political PhilosophyTotal%Conservative33Moderate48Liberal20EmploymentTotal%Employed full-time43Employed part-time8Self-employed12Not employed, but looking for work3Not employed and not looking for work1Retired30Student6Homemaker7

Shareholder Demographics (Contd)Households Total Net WorthTotal%Less than $50,00013$50,000 to $99,99912$100,000 - $249,99917$250,000 or more36Not sure3Decline to answer19Investable AssetsTotal%Less than $50,00026$50,000 to $99,99915$100,000 - $249,99916$250,000 or more17Not sure6Decline to answer20Household IncomeTotal%Less than $50,00022$50,000 to $99,99933$100,000 to $149,99922$150,000 or more11Decline to answer 12Member of Investment ClubTotal%Current Member3Former Member6Never a Member91Heard of National Association of Investors Corporation (NAIC)Total%Yes33No67Knowledge of InvestingTotal%Not at all Knowledgeable14Somewhat Knowledgeable68Very Knowledgeable14Extremely Knowledgeable3

Shareholder Demographics (Contd)RegionTotal%East 25Midwest21South32West 22

Detailed Methodology

Detailed MethodologyThe Voice of the American Shareholder Quarterly Poll Wave 6 was conducted by Harris Interactive on behalf of BetterInvesting. Interviewing was conducted between April 26 and May 6, 2005 among a nationally representative sample of 1,002 U.S. adults aged 18 and older who currently have investments in individual stocks or stock mutual funds. The length of the questionnaire was 10 minutes in length, not including the demographics.

SAMPLE SELECTION

Harris Interactive maintains the Harris Poll Online database (HPOL) comprised of several million respondents who have agreed to participate in survey research. The HPOL database was used as the sample source for this study. E-mail addresses for respondents in the database have been obtained from over 100 sources, including the HPOL registration site, Yahoo!, HPOL banner advertisements, and MSN/Hotmail.

Qualified respondents for this study were U.S. adults age 18+ who identified themselves as currently having investments in individual stocks or stock mutual funds in response to the question Please indicate which types of investments or investment accounts you personally have.

ONLINE INTERVIEWING PROCEDURES

Interviews were conducted using a self-administered, online questionnaire, via proprietary, web-assisted interviewing software. The HPOL interviewing system permitted online data entry of interviews by the respondents. Questionnaires were programmed into the system with the following checks:1. Question and response series2. Skip pattern3. Question rotation4. Range checks5. Mathematical checks6. Consistency checks7. Special edit procedures

Detailed Methodology (contd)ONLINE INTERVIEWING PROCEDURES (contd)

To maintain the reliability and integrity in the sample, each invitation contained a password that is uniquely assigned to that e-mail address. A respondent was required to enter the password at the beginning of the survey to gain access into the survey. Password protection ensured that a respondent completed the survey only one time.

To increase the number of respondents in the survey and to improve overall response rates, up to two additional reminder invitations are typically mailed at 2-4 day intervals to those respondents who have not yet participated in the survey. For this study, one reminder was sent to potential respondents.

To increase the number of respondents in the survey and to improve overall response rates, respondents were provided with a summary of some of the survey responses. This too was done via the Internet. Respondents were sent an email that provided them access to a web site that contained the survey findings. As with the survey itself, this was a password protected site that was accessible for a limited period (1-2 weeks).

All data were then tabulated, checked for internal consistency and processed by computer. A series of computer-generated tables were produced for each of the key sample groups that showed the results of each survey question, both by the total number of respondents and by the key subgroups.

Detailed Methodology (contd)WEIGHTING

Completed interviews were weighted to figures obtained from the Current Population Survey (CPS). Harris used several demographic variables (e.g., sex, age, education, race and ethnicity and income) to generalize survey results to the population at large.In addition, Harris Interactive applied a proprietary technique to the data called "propensity weighting" that essentially balanced all the characteristics (e.g., demographic, attitudinal, and behavioral) of online respondents. It is no surprise that certain kinds of people have a greater or lesser likelihood to be online and therefore to reply to our surveys. To account for this, Harris gave each individual a propensity weight which corresponded to their likelihood to be online. This ensured that the sample represented the general shareholder population at large and was not skewed toward more active online users or survey takers. In addition, people who had a lesser likelihood to be online acted as a proxy for those who are not online at all. Typical propensity weights that were used included measures of activity (our online respondents do more things), knowledge (our online samples are better informed), and attitudes (our online samples are more skeptical or cynical).

Detailed Methodology (contd)WEIGHTING (CONTD)

It is also worth mentioning that Harris conducts parallel telephone and online research on a regular basis through The Harris Poll, our monthly omnibus survey. By conducting this research, Harris is able to track results to make comparisons between data collected online and by phone, closely examine the biases and most importantly, develop strategies for correcting these biases. In fact, Harris has an internal department that is entirely focused on conducting this research on research.

EDITING AND CLEANING THE DATA

The data-processing staff performed machine edits and additional cleaning for the entire data set. Our edit programs acted as a verification of the skip instructions and other data checks that were written into the online program. The edit programs listed any errors by case number, question number and type. These were then resolved by senior personnel, who inspected the original file and made appropriate corrections. Complete records were kept of all such procedures.

Detailed Methodology (contd)CALCULATION FOR BETTERNVESTING INDEX

The BetterInvesting Index measured shareholders overall perspective in the stock market from three different vantage points or categories: 1) overall confidence in the stock market and economy, 2) personal investment behaviors and 3) attitudes about risk and the value of stocks.

Within each of these vantage points, the Index was derived from component items from the BetterInvesting Voice of the American Shareholder January 2004, May 2004, November 2004, February 2005, and May 2005 surveys. The component items are as follows:

1) Overall confidence in the stock market and economy:Q410: How much confidence do you have the U.S. economy is generally moving in the right direction?

2) Personal investment behaviorQ511 a, b: Thinking about your investment portfolio, over the next six months, do you plan to increase, decrease, or make no change in your investments in (individual stocks; stock mutual funds)?

Q505: Investment risk is typically defined as a greater likelihood that your portfolio may lose value but it often associated with higher returns. How would you characterize most of your investments on a scale from not risky at all to very risky

3) Attitudes towards investment risk and the value of stocks:Q502: How strongly would you agree or disagree with the following statements:Its a good time to move money into safer, lower risk investments from higher return/higher risk investments.Most stocks are a better bargain now than they were a year ago.Its a good time for new investors to get involved in the stock market.

Detailed Methodology (contd)CALCULATION FOR BETTERINVESTING INDEX (contd)

For each component item within the three overall categories, a component score was calculated by taking the difference of the percentage of positive responses and the percentage of negative responses.

For example, in May 2005, Q410: How much confidence do you have that the United States economy is generally moving in the right direction?

14% responded that they have a great deal of confidence in the direction of the economy, 77% responded that they had a fair amount or not much confidence and 9% indicated they had no confidence at all.

This yielded a component score of 14% - 9% = 5.0%

To calculate the BetterInvesting Shareholder Index, we then took the mean of the 7 component scores.

Detailed Methodology (contd)CALCULATION FOR BETTERINVESTING INDEX (contd)

The following table shows the component scores for each item used in calculating the Index for September 2003, January 2004, May 2004, November 2004, February 2005, and May 2005.

Please note that since the three statements that make up Q502 were not asked in the September 2003 survey, the scores below should only be used to get a general sense of how the scores have changed on the other items that were repeated between September 2003 and November 2004.

Detailed Methodology (contd)CALCULATION FOR BETTERINVESTING INDEX (contd)

Validating the Index

In order to measure the validity of the BetterInvesting Index, an investment allocation exercise question was included in the January 2004, May 2004, February 2005, and May 2005 surveys. The purpose of this question was to be able to link the attitudinal nature of the NAIC Index to observable behavior in future waves of this research.

The question (Q515) asked: If you had ($10,000/$100,000) to invest, how much would you invest in each of the following?Individual stocksStock mutual fundsIndividual bondsBond mutual fundsCashAlternative Investments

This question was structured so that half of all shareholders interviewed were shown $10,000 in the question and the other half were shown $100,000.

The idea was that changes in shareholder confidence, as measured by the Index, should be reflected in changes in portfolio allocation. As confidence improves, we would expect that shareholders would become growth-oriented and conversely as confidence weakens, we would expect that shareholders would allocate money towards safer investments.