When it comes to economic and geopolitical issues keeping U.S. investors up at night, the ongoing U.S.-China trade dispute trumps the growing national debt and the Fed’s interest rate cuts, according to a new survey.
Almost 46% of 1,500 investors 35 and older cited the trade war as the most concerning economic and geopolitical factor that can affect their investment portfolios, a survey sponsored by SophisticatedInvestor.com finds.
Investors in the 35-44 year age group are slightly more concerned about the dispute than the general investor population, at roughly 48%.
“The fact that nearly half of all respondents to the survey sighted the U.S.-China trade war as the primary concern for the direct effects on investment portfolios, comes as little surprise,” the website explained in a statement.
After all, it noted: “Over the past couple of weeks, financial markets have endured a roller coaster ride specifically attributed to uncertainties surrounding the escalating trade war between the two countries. The general consensus among analysts is the market volatility will continue until the trade war ceases.”
However, “when it comes to the effects of this escalating trade war … on the average American’s investments, the most important thing is don’t panic,” Amine Rahal, CEO of the website, said in a statement. “Only time will tell how long this will continue, but ultimately, a diversified portfolio is the best bet to keep one’s investments safe during economic uncertainty.”
The next most popular response among investors surveyed is the increasing national debt, cited by about 27% of respondents; the Congressional Budget Office (CBO) recently projected that the national debt could hit $1 trillion by 2020, which might increase pressure on politicians to consider cuts to Social Security and Medicare, for instance.
Coming in third among investor concerns is the Fed’s interest rate cuts, at a distant 11%, according to SophisticatedInvestor.com.
The website points out that, a month ago, the Fed cut interest rates for the first time since 2008 and then, last week, Federal Reserve Chair Jerome Powell indicated there’s the possibility of another rate cut in September due to the escalating global economic turmoil of the past month.
The central bank has no playbook for how to deal with the current situation, Powell said in prepared remarks Friday at the Kansas City Fed’s Economic Policy Symposium in Jackson Hole, Wyoming.
Among the other concerns expressed by U.S. investors surveyed are: China-Hong Kong tensions (8%), Persian Gulf tensions (5%) and India-Pakistan tensions over Kashmir (3%), the poll finds.