Many retirement savers who were spooked after the 2008 crash are finally feeling confident enough to move their cash into stocks and bonds — even during the latest two-week period of market volatility, according to Bank of New York Mellon analysts who spoke at a press briefing on Thursday.
But where are the safe havens? Current volatility is centered on the traditionally safe U.S. Treasuries market, and gold futures are now residing in negative territory, so investors who are saving for retirement are wondering where to put their money.
“There is no such thing as the perpetual safe haven,” said Anjun Zhou, head of multiasset research with Mellon Capital Management, who instead keeps an eye out for markets that are currently outperforming. “For decades we thought Treasury bonds were the safe haven, and look at what’s happened in the last two months.”
‘A Buying Opportunity’
Save havens may be a moving target these days, yet Americans’ confidence in the U.S. economy is at its highest point in five years, BNY Mellon Investment Management CEO Curtis Arledge asserted, noting that people who were in cash a couple of years ago now want to invest despite the recent bond market selloff.
“People are seeing this time as a buying opportunity,” Arledge said.
On Tuesday, the Conference Board reported that its consumer confidence index jumped to 81.4 in June from 74.3 in May, for the best reading since January 2008.
Redesigning 401(k) Plans
But for those who are ready to re-enter the markets, the traditional style box approach to defined-benefit (DB) retirement plans doesn’t work anymore in this high-risk, low-yield global environment, said Robert Capone, executive vice president with BNY Mellon Retirement.