Volatility is just part of the investing game, according to an MFS Investing Sentiment Survey. The firm found 60% of young investors feel the “ups and downs” the market has experienced recently are normal, compared with 54% of all respondents.
Although it may be normal, young investors are still concerned. Thirty-seven percent said they’ll “never feel comfortable investing in the stock market,” compared with 25% of all investors.
“A majority of younger investors feel the volatility of the stock market is normal but more than one-third behave as if they are scared by it, keeping 33% of their assets in cash,” William Finnegan, senior managing director of global retail marketing at MFS, said in a statement. “Advisors recognizing this contradiction between sentiment and behavior have a unique opportunity to help clients find an asset allocation they can be comfortable with—especially during volatile times—that keeps them on track toward their long-term goals.”
The findings were released Wednesday from a study conducted in February among 974 adults with $100,000 or more in household investable assets and 621 licensed financial advisors (either FINRA or SEC) who have been licensed for at least three years with $500,000 or more in annual mutual fund sales. The first wave of findings, released in April, focused on clients’ fears over inflation.
Finnegan added that advisors can keep their clients on track focusing on what keeps them up at night rather than discussing specific investments, “which we know many investors believe to be overly complex in the first place.”