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Portfolio > Portfolio Construction

Investors Sitting Tight Despite Volatility Worries: Edward Jones

By Michael S. Fischer

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A majority of Americans say they are concerned about market volatility over the coming year, and a third believe their retirement portfolio would suffer in the event of a market correction, according to new research by financial services firm Edward Jones.

Yet, relatively few Americans are inclined to make hasty decisions about their portfolios.

ORC International’s Telephone CARAVAN Omnibus conducted a survey in late August on behalf of Edward Jones involving a nationally representative sample of 1,006 respondents.

The survey found that 64% of respondents were concerned about market volatility over the next 12 months. Three-quarters of baby boomers and two-thirds of Gen Xers, those closest to retirement, expressed concern about near-term volatility.

At the same time, 55% said they would not adjust their portfolios if the stock market declined more than 10%.

“It’s encouraging to see that investors aren’t making rash or emotional decisions when it comes to their investment portfolios,” said Kate Warne, principal and investment strategist for Edward Jones, said in a statement.

“It’s important to remember that markets naturally peak and dip over time, fluctuating much more frequently than the U.S. economy. Having a well-diversified portfolio will work to hedge against market volatility, lessening the impact of inevitable corrections.”

Thirty-three percent of survey participants believed that their retirement portfolio was not diversified enough to live comfortably in retirement. Millennial investors were as concerned as their Gen X and boomer counterparts.

“It’s understandable that those closest to retirement would be concerned about how a market correction will impact their ability to retire comfortably, but others are concerned as well,” Scott Thoma, principal and retirement strategist for Edward Jones, said in the statement.

Thoma said reviews of portfolios were always important, especially as investors approach their retirement. “This will help ensure that in the event of any unexpected market volatility, drastic changes will not be needed.”

Another recent poll found American investors comfortable with the current market even as they anticipated an end of the long bull run. As for rebalancing their portfolios, a third of respondents said they would rather be stuck in traffic for an hour.

— Check out A Low Volatility Trap Is Inflating Market Bubbles on ThinkAdvisor.

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