More Americans say they are okay with riding out market waves than in the past, new data found. But despite the ability to keep their cool, the majority would like to invest in a way that safeguards some of their retirement savings in the event of a deep dip.
In its 2018 Market Perception Study, Allianz Life discovered 35 percent of working adults are comfortable with today’s market conditions. Only 26 percent felt this way in 2015.
Even so, some investors are less cool, calm and collected than others.
“Volatility matters, and while we see some increasing comfort with volatility, it is driving a simmering anxiety in many Americans,” Paul Kelash, vice president of Consumer Insights for Allianz Life, said in a statement. “This anxiety about the negative effects volatility can have on their retirement savings is very real and people are still searching for the right solutions.”
Survey results showed 37 percent of respondents are feeling somewhat anxious, and 38 percent fear they wouldn’t be able to recover from a significant plunge in the market in time for retirement. And considering the number of Boomers approaching retirement age, their worries make sense.
Intensifying concerns, many anticipate that volatility will continue. Others “fear a big market crash (42 percent) or a major recession on the horizon (44 percent). As a result, interest in financial products that offer a balance of growth potential and protection is growing,” Allianz noted.
In fact, 57 percent of workers are willing to give up gains in lieu of protecting their nest egg. This is up from 48 percent in 2015.
Just under a third (31 percent) indicated that five to 10 years before retirement it’s important for them to invest in a financial product that balances potential growth (up to 10 percent) with a level of protection that would preserve their savings even if the market fell 10 percent.
And this preference is even more pronounced among wealthier investors.
“More than three-fourths (78 percent) of respondents with $200K+ in investable assets said it is important to them to have some of their savings in a financial product that protects it from market loss (versus 69 percent of those with less than $200K in investable assets),” Allianz reported, continuing, “68 percent said they are willing to give up some potential gains for a product that protects a portion of their retirement savings (versus 55 percent of those with less than $200K in investable assets).”
Jessa Claeys is a writer, editor and graphic designer.
