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Investors think they're a lot smarter than they are

MARKETWATCH 10:44 AM ET 5/27/2016

More than 60% claim their level of financial sophistication is 'advanced'

Here's a surprise. Investors aren't nearly as smart as they think they are.

When analysts at State Street Global Advisors asked investors about their money smarts, more than 60% called their level of financial sophistication "advanced."

But as the data below show, investors have trouble backing it up when pressed to demonstrate their knowledge:

State Street gave investors a financial literacy exam that tested knowledge on topics such as diversification, inflation and basic investment options.

"The results indicated that on the whole, investors are overconfident in their abilities. In fact, the average global financial literacy score is just 61%, barely above a failing grade, and far from advanced," State Street said.

The U.S., by the way, was a touch worse, with a literacy score of 60%.

Read:Financial illiteracy may have cost investors $200 billion over 20 years (http://www.marketwatch.com/story/ financial-illiteracy-may-have-cost-investors-200-billion-over-20-years-2016-05-26)

Meanwhile, 66% of investors around the world said the best investment was entirely the result of one's own decision.

"Given their low financial literacy scores, this suggests that investors may be attributing more credit to themselves than is deserved. Alternatively, investors may not realize the importance of soliciting advice from professionals, or of pursuing additional investment education on their own," State Street said.

Test your financial literacy:3 basic financial questions that surprisingly stump most Americans (http:// www.marketwatch.com/story/3-basic-financial-questions-that-surprisingly-stump-most-americans-2016-05-18)

-William Watts; 415-439-6400; [e-mail]


(END) Dow Jones Newswires
05-27-161044ET
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