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Portfolio > ETFs > Broad Market

Loss protection is key for today's investors

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In post-Great Recession times, investors are looking for asset protection of the strongest form. It may come as no surprise that most would prefer a financial product with no potential loss than a product with unlimited potential growth and unlimited potential loss. 

That’s according to a recent study by Allianz Life, which surveyed investors over age 25 with at least $200,000 in investable assets. In “Allianz Life 2013 Investor Market Perceptions Study,” more than three quarters of those surveyed said they’d prefer a product that offers a balance of up to 10 percent potential growth with a level of protection that shelters them from up to 10 percent of losses.

The study reports that, despite a 1,000-point gain in the S&P 500 between March 2009 and August 2013, the majority of respondents remain weary when it comes to market volatility. In fact, 79 percent of respondents said they believe the market will continue to be volatile and 59 percent noted market volatility as an economic concern having an affect on their retirment outlook. More than one-third of respondents noted that continued market volatility was preventing them from investing idle cash.

When asked what they would do with $20,000 in cash, 63 percent of respondents said they would invest in a product that offered both loss protection and growth potential. Only 20 percent said they would invest in a product with high growth potential. Overall, 84 percent said they agreed that investors should always have protection from loss, even if it reduces potential gains. 

“It’s clear that for many investors the trauma caused by the 2008 financial crisis is still being felt and is dampening their willingness to take on risk with their savings,” said Allianz Life Financial Services, LLC President Robert DeChellis. “Although we’ve seen strong equity markets this year, volatility remains a constant concern. With fixed income investments offering disappointing returns, there is a strong need for solutions that can provide solid upside potential but also protect against some of the downside risk that is keeping people from participating in the market.”


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