This list paints a very grim picture of the state of American financial literacy at the moment. It's easy, of course, to nitpick some of it. For example, a lot of respondents had trouble identifying stocks as providing superior returns over the long term. Given that we just learned that Treasuries have outperformed stocks over the past 30 years, maybe it's understandable that investors were uncertain on that one.
Yes, it may be tempting to challenge various details of the findings, but it would be unwise to reject the overall conclusion. The 19th item on the list, which shows the shockingly low amount of funds that most Americans have put aside for retirement, didn't come from the SEC. Rather, that number came from a recent piece in The New York Times about the grim state of our retirement system. Clearly, we have very serious problems when it comes to understanding how much we need to live comfortably in retirement. And a woeful lack of financial knowledge is partly to blame for that.
So we shouldn't spend too much time wondering whether or not Americans in general are financially literate; it's abundantly clear that we are not. The more relevant (and urgent) questions are: What does this mean? And what should we do about it? In a future commentary, we'll try to answer those questions.
In the meantime, you can read about our "13 Steps to Investing Foolishly" as a great way to brush up on your own financial literacy.