Eight years into the economic recovery, 49% of investors in a study released Monday by Dreyfus, a BNY Mellon company, reported that they had yet to reevaluate their investment approach given the possibility of a shifting investment landscape.
“As long-term risk/return expectations have shifted with an increase in inflation, the rise of U.S. nationalism and record-low volatility, investors would be well served to reevaluate their portfolios in light of changed circumstances to determine if they will continue to meet their investment objectives,” Dreyfus chief executive Mark Santero said in a statement.
Toluna International conducted the study online with 1,250 individual investors 21 or older with at least $50,000 in investable assets, along with 200 independent and institutionally based financial advisors.
Dreyfus noted that older investors were ignoring past market precedents they had lived through in adjusting their portfolios: a variety of stock market highs—the bull markets from 1987 to 2000 and 2009 to the present—and lows—the savings and loan crisis in the 1980s, the 1987 stock market crash and the 2008 financial crisis.
In the current low-volatility environment, one specialist sees 50/50 odds that the Federal Reserve will follow its June 14 rate hike with a third one later this year. A late spring survey of global investors showed that many think equities are overvalued.
Even with past knowledge, the Dreyfus research found that 61% of investors 55 and older said they had not or would not reevaluate their investment approach in today’s existing investing environment.
In comparison, millennial investors who experienced the 2008 market meltdown and who began saving early in their careers showed a forward-thinking approach to reevaluating their portfolios.
Sixty-five percent of millennials reported that they had already evaluated their investment approach, compared with 51% of their Gen-X counterparts and just 39% of those aged 55 and older.
In addition, 63% of millennials said they had worked with an advisor in reevaluating their investments, while only 38% of those 55 and up had done so.
“Our survey revealed that younger investors have demonstrated in greater numbers a more proactive approach to reassessing their portfolios and seeking out their advisors for counsel, some of whom might lack the historical market experience and accumulated wealth of older investors,” Santero said.