Key Findings Snapshot:
- More Americans say they fear a major recession (48% in Q2/46% in Q1/44% in 2018) or major market crash (47% in Q2/46% in Q1/42% in 2018)
- Only 31% of Americans said they are comfortable with market conditions and ready to invest, down from 33% in Q1, and 35% in 2018
- Nearly three quarters (72%) of people say it’s important to protect retirement savings, up from 68% last quarter
MINNEAPOLIS – July 9, 2019 – Market volatility in the second quarter of 2019 has Americans increasingly worried about their finances and retirement savings, according to the latest AllianzQuarterly Market Perceptions Study. People are growing increasingly uncomfortable with market conditions, as only 31% say they are comfortable with market conditions and ready to invest, down from 33% in Q1, and 35% in 2018. In addition, more Americans say they fear a major recession (48% in Q2/46% in Q1/44% in 2018) or major market crash (47% in Q2/46% in Q1/42% in 2018) is coming.
The findings, released today by Allianz Life Insurance Company of North America (Allianz Life), show that Americans are starting to feel the pressure from major market swings over the past few months.
“Volatility has become the norm over the past year and a half, but that doesn’t mean those major market swings are any less gut-wrenching," said Kelly LaVigne, vice president of Advanced Markets, Allianz Life. “The collective worry around an impending market crash or recession has been growing steadily since last summer, and people are starting to wonder when the other shoe will drop.”
The volatility might also be making people shy away from investing funds, with fewer people saying that now is a good time to invest in the market (37% in Q2 compared with 41% in Q1). Interestingly, those with the longest runway toward retirement, millennials, were more likely to say they were too nervous to invest right now (36% compared with 34% of Gen Xers and 28% of baby boomers).
Desire for Protection
As a result of this ongoing volatility, interest in financial products that offer a balance of growth potential and protection is rising, with a third of people expressing interest in such a product, up from 27% last quarter. Further, 72% of people say it is important to have some retirement savings in a financial product that protects from loss, up from 68% last quarter.
Those with higher investable assets are more likely to say they would give up potential gains for a financial product that protects a portion of their retirement (71% of respondents with $200K+ in investable assets compared with 52% of respondent with less than $200K in investable assets).
“It’s no surprise people want to move toward protection as they see market drops put a dent in their hard-earned savings,” said LaVigne. “This is especially important for people getting ready to retire in the next five to 10 years who might not be able to rebuild their savings in time for retirement.”
Baby boomers are increasingly worried about the effects of volatility on their retirement savings, with more baby boomers saying that volatility in the market is making them anxious about their nest egg (38% in Q2 compared with 32% in Q1).
“Those that are feeling worried about their retirement savings within the current financial forecast should meet with their financial professional to assess their risk exposure,” said LaVigne. “Creating a strategy that addresses an ongoing volatile market is as important as ever.”
Allianz Life conducted an online survey, the 2019 Q2 Allianz Life Quarterly Market Perceptions Study in May 2019 with a nationally representative sample of 1,006 respondents age 18+.
Allianz Life conducted an online survey, the 2019 Q1 Allianz Life Quarterly Market Perceptions Study in March 2019 with a nationally representative sample of 1,005 respondents age 18+.
Allianz Life conducted an online survey, the 2018 Market Perceptions Study, in April 2018 with a nationally representative sample of 803 respondents age 18+, who are currently not retired.