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Investors globally expect a 9 percent return on their portfolio

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Seven in ten investors globally are conflicted about the appropriate balance between risk and return. And U.S. investors have higher expectations than others, according to new research.

Natixis, a French corporate and investment bank, discloses these findings in its “2014 Global Survey of Individual Investors.” The report, in its 5th iteration, examines more than 5,000 investors across 14 countries to better understand their attitudes towards risks, expectations on returns, and perceptions about measuring performance. The survey also measures how investors benchmark performance and navigate markets.

The research indicates that, on average, investors say they need gains of 9 percent above inflation (9.5 percent in the U.S) every year to meet their financial goals. But few are prepared to take the risks necessary to achieve this return.

Indeed, 7 out of 10 respondents say that, if given a choice, they would favor safety over performance in investment options.

The survey reveals the following about investors globally:

  • 80 percent make decisions based on gut instinct.

  • 70 percent have no financial plan

  • 60 percent have not set financial goals

  • 37 percent have little or no knowledge about their retirement income goals; and

  • 16 percent — just 1 in 6 investors — say they have a “strong appreciation” for annual retirement income needs.

Just over 4 in 10 (42 percent) respondents say that a greater knowledge of investments would help them most in reaching their financial goals. More than half say they have little or no knowledge of the strategies they need to secure steady returns through market cycles.

Additionally, more than 6 in 10 respondents (63 percent) say they use an investment adviser at least occasionally. This figure is up 10 points from the percentage recorded in Natixis’ 2013 survey.

“Investor attitudes are improving, with 68 percent of respondents saying they [are] now more interested in discussing risk with an advisor,” the report states. “And 63 percent reveal their needs and expectations more than ever.”

Read the full report here.


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