Staring Drivers into Stopping

​Staring Drivers into Stopping
 
If the number of pedestrian deaths every year is any indication, the law clearly isn’t enough to make drivers stop at cross walks. Apparently, making eye contact might help. In a recent study published in Safety Science, researchers recruited two men and two women to stand in pedestrian crossings in a town in western France. They were instructed to either stare at the faces of oncoming drivers or look in the general direction of the vehicles but not at the driver. The results showed that of the 2,560 drivers unwittingly involved in the experiment, 67.7 percent stopped at the pedestrian crossing when the pedestrian looked directly at their face. When the pedestrian gazed over their heads, only 55.1 percent of drivers gave way. It also helps to be female: 65 percent of drivers stopped for a woman while only 57.8 percent stopped for men. (April 2015)


U.S. Retirement Savings Still Slim
 
IRAs, 401k’s and other tax-advantaged retirement savings plans in the U.S. aren’t all they’re cracked up to be, according to a study by three Federal Reserve Board economists. Such defined-contribution plans hold an ever-growing pot of cash, but the ratio of retirement wealth to personal income stopped growing around 2000. The culprit: the wild ride in financial markets so far this century. “Disappointing macroeconomic performance has revealed important concerns,” the study says, about the ability of the current system of “to provide widespread retirement security.” The underfunding of defined contribution plans underscores the continued importance of Social Security to many Americans’ retirement, the study says, and the government will put many families at risk by underfunding it. Social Security, according to the report, “is by far the single largest component of saving for most families, and the most important key to their retirement security.” (April 2015)


Australia’s Selfies a Boon for Stocks
 
Australia’s self-directed pension savings plans, known as selfies, hold a combined half-trillion dollars, including 16 percent of Australian equities. Their cash holdings have been declining since 2012, recently falling below 28 percent of assets. But they could fall even further. Further interest rate cuts by Australia’s central bank would boost demand for stocks with high dividends, according to Credit Suisse, as each additional quarter-point cut by the central bank would have the effect of reducing the cash yield on government securities by $500 million. To keep income levels steady, investors might very well switch $11 billion in cash over to equities, where they can find better returns through dividends. Indeed, Australia’s top 50 equities have a gross dividend yield of 6 percent, well above the 3.2 percent annual interest on a 1-year deposit. (April 2015)

These articles were first published in The Financialist in April 2015