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Wealthy Investors Remain Calm During ‘Corona Crash’

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As the decade-long bull market came to an abrupt end, individual investors were not allowing concerns about the economic effects of the market plunge to influence their investment decisions, Spectrem Group reported Friday.

This finding emerged from two surveys, one conducted among 845 investors during the last week of February, the other among 795 investors polled March 4 to 9. Survey participants had a net worth between $100,000 and $25 million, not including their primary residence.

The survey found that from late February to mid-March, investors’ concern level over the effect of Covid-19 on the economy jumped 10 points, from 60.94 to 70.49 on a 100-point scale.

A fifth of investors said they had not been affected by the “Corona Crash.” Seventeen percent reported that they had bought equities during the market decline, while only 9% had sold equities.

Financial professionals appeared to be communicating with their clients during the challenging period, as less than a third of survey participants said they had not heard from their financial advisor from late February to mid-March.

According to the surveys, most investors expected their financial situation at the end of 2020 to be the same as it is today. Most also did not plan to make dramatic changes to their portfolios in the next 12 months.

And in a finding that appeared to echo certain segments of the American commentariat, more than half of investors believed that coronavirus was being blown out of proportion by the media.

“While the world adjusts to the impact of the coronavirus on the health of the world, it is vital to financial advisors that they understand how investors are reacting to the stock market decline,” Spectrem president George Walper said in a statement.

“The timeliness of this study provides real-time reactions that advisors can use to address investor concerns in the days and weeks to come.”

— Check out Pandemic Ready: What Your Clients Need From You on ThinkAdvisor.