Institutional Investors Say They’re Confident About Navigating Market Volatility

2. Not taking into account the effect of a down or volatile market.

Drawing on retirement assets in a down or volatile market can end up compromising a portfolio’s ability to see a retiree through retirement. The retirement guide points out that greater diversification among noncorrelated asset classes and annuities with guarantees and/or protection features can help ward off the damage that can be done to a portfolio under such conditions.

More than nine in 10 institutional investors in a new survey expressed confidence that their organization could successfully navigate future market volatility, Wilshire Associates reported this week.

Thirty-nine percent of the 75 investors surveyed said they were very confident, and 56% were somewhat confident.

As to how their organization’s preparedness today for a bear market compared with how well it was prepared in 2007, 58% of respondents said they felt more prepared, while 29% purported to feel “far more prepared.” Thirteen percent reported feeling the same level of preparedness.

“If history teaches us anything, it is that markets do not go up forever in a straight line, so it is reassuring that many institutions have been proactive in their preparation for this inevitability,” Steven Foresti, chief investment officer of Wilshire Consulting, said in a statement.

“However, with roughly six in 10 institutions feeling anything less than far more prepared for a bear market than in 2007, and the same number feeling only somewhat confident about weathering volatility, there’s opportunity for improvement.”

Looking forward to the next 12 months, 21% of respondents said U.S. equities would generate the best market returns, and 20% cited emerging market equities.