Most U.S. Investors Remain Unfazed Over Stock Market Volatility

While nearly all U.S. investors share health concerns about the COVID-19 virus, new survey results reveal that most investors so far are staying the course with their financial investments.  

 

The survey by Janus Henderson of more than 1,000 U.S. adults to gauge general reaction to the coronavirus and specific behaviors regarding their investments found that approximately 72% of stock market investors have taken no action since the beginning of the market correction. In fact, 17% bought more stock than they sold and only 11% sold more stock than they bought, according to the survey, which was conducted March 16-17, 2020. Of the total survey respondents, 589 invest in the financial markets. 

 

Most of the full sample was optimistic about where the stock market will be 12 months from now. Approximately 66% believe the market will be higher, while 15% believe it will be the same and 19% believe it will be lower. “It would appear from the data, that the sell-off has not been driven by main street investors, as the majority (72%) have not taken any action—buying or selling since the market decline began,” notes Matt Sommer, Senior Managing Director and Head of Retirement and Wealth Advisor Services for Janus Henderson.  

 

“The key takeaway for advisors is not to assume all clients are panicked or unnerved by the market decline,” Sommer adds, further noting that “many savvy investors have experienced market downturns in the past and know from experience the importance of maintaining a long-term perspective.”

 

The primary concern among all respondents was the potential for themselves or a loved one to contract the virus (42%), followed by general unease regarding the economy and jobs (23%) and the day-to-day disruption of life (17%). Only 8% of respondents cited the financial markets and experiencing investment losses as their primary worry. 
That said, nearly half (46%) of stock market investors are watching the financial markets more closely than usual, while 40% are keeping tabs on the markets as they normally would and 14% are checking even less periodically. 

 

Proactive Advisors  

 

Among the 251 respondents in the sample who work with a financial advisor or financial planner, the majority (58%) claim that their advisor or planner has contacted them proactively to discuss the recent events. The most common advice for the 201 respondents who received a recommendation was to “stay the course” (50%), review their financial plan (27%), use the drop to buy more stock (25%), conduct tax planning strategies such as tax loss harvesting and Roth conversions (17%) and refinance their mortgage (13%). 

 

Respondents generally were satisfied with the performance of their advisor over the last month with 55% extremely or somewhat satisfied, 24% feeling neutral and 21% feeling somewhat or extremely dissatisfied. Among those who do not use a financial advisor, the recent market correction has prompted 20% to reconsider their decision, the survey found. 

 

“Times of volatility create a unique opportunity for advisors to make a meaningful difference in how clients are feeling about their financial future,” Sommer further observes in noting the importance of advisors empathizing with their clients who are feeling unnerved about the markets.