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Americans Focused on Low-Risk Investments, Long-Term Gains: Fidelity

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What You Need to Know

  • Long-term gains are top of mind for 76% of respondents, and 63% prefer low-risk, low-reward investments over riskier trades.
  • Many respondents worry about their ability to save, so inflation is a top concern.
  • Fifty-one percent who invest or save aren't investing as much as they want to; 31% cite a lack of investing knowledge.

Two years after the pandemic-related shutdown in the U.S., a new survey from Fidelity Investments finds that 63% of actively investing Americans have changed their investing habits in some way.

Seventy-six percent of respondents who invest personally, through a company’s retirement plan or through a paid financial professional are prioritizing long-term gains over short-term ones when investing, and 63% are prioritizing low-risk, low-reward investments over risky, high-reward trades.

Seven in 10 survey participants said they are more focused on the money they make from an investment than the type of company they are investing in. 

Many are also becoming more aware of how they spend money as they worry about their ability to save. Inflation is a top concern. 

“In the last two years, we saw an increased emphasis on short-term investing and spending habits, but as this period of turmoil from the pandemic, market volatility, inflation and geopolitical events continues, we’re seeing shifts to longer-term planning and saving,” Roberta King, a vice president and branch leader at a Fidelity Investments Investor Center, said in a statement. 

“These shifts are impacting how people are choosing to spend, save and invest their money, on their own and through their employer’s retirement plan.” 

YouGov conducted a national online survey in February among 257 U.S. adults.

3 Big Shifts

Following some of the trends stemming from events in the past two years of uncertainty — including the “YOLO economy,” “revenge travel” and “the Great Resignation” — the survey identified key shifts American consumers have made since the start of the pandemic toward saving and investing for the long term.

For one, their spending habits are evolving. Here’s what they now prefer:

  • 65% put money toward an emergency fund; 35% spend money on a vacation. 
  • 79% save money for retirement; 21% save money for a wedding or big event. 
  • 62% contribute $100 toward 401(k); 38% spend $100 on a feel-good purchase 

The share who choose to put money into their 401(k) over making a feel-good purchase rises to 72% for those with a retirement plan. In addition, 81% of women are prioritizing saving for retirement rather than saving for a wedding or other big event. 

Fidelity noted that in another recent study, 58% of women reported that the pandemic has influenced the way they think about money and make financial decisions. 

The new survey also found that American who are actively investing, 9% have begun doing so for the first time, 20% have increased how much they invest and 19% have changed the types of investments they make.

Fifty-seven percent of respondents reported that they are also prioritizing long-term retirement plans over short-term workplace benefits. Fifty-seven percent said they would prefer a higher company match on their current retirement plan than more paid time off than they get, and 56% would prefer a strong retirement plan match over full-time remote work. 

At the same time, consumers 18 to 35 tend to disagree on paid time off. Fifty-four percent of young investors, who are experiencing the combination of external events for the first time in their lives, would rather have more days away from work than a higher company workplace retirement plan match policy. 

A third shift the Fidelity survey uncovered is a need for financial education.

Fifty-one percent of respondents who are investing, saving or both in some manner said they feel they are not investing as much as they want to, with 31% citing a lack of knowledge about investing. 

The study found those who work with a financial advisor for help with education and advice are much more likely than the overall sample to prioritize long-term financial goals.

Seventy-two percent choose a more robust company retirement plan match vs. 57% overall; 28% favor more paid time off, vs. 43% overall. Budgeting and saving, inflation and retirement accounts are the top areas respondents identified as important to successfully manage their finances. 

“This is not the first priority shift we’ve seen from consumers since the start of the pandemic and I doubt it will be the last,” King said. “We are seeing continued record growth at Fidelity across customers, assets and engagement, in part, by the ongoing market volatility over the last two years, reinforcing the need for financial education.”