With the stock market experiencing some of the biggest swings in history and the bull run officially over, Americans are concerned that the worst is yet to come. But the good news is, they are not panicking quite yet. The latest Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America finds Americans are worried, but trying to take a calm approach to investing for retirement.
Market crash and recession fears increased significantly from the end of 2019 when worries were at their lowest levels in over a year and half. Now, nearly two-thirds of Americans (63%) express concerns about a recession (compared with 43% in Q4 2019). In addition, 57% think that the market hasn’t bottomed out yet.
Despite increased anxiety over market swings, over half (52%) of Americans understand that it’s good time to stay neutral and not take any action because of market conditions.
“Americans who have watched their investments and retirement savings plummet over the past few weeks might be wondering if they should take action to stem the bleeding,” said Kelly LaVigne, vice president of Advanced Markets, Allianz Life. “The good news is that, for the majority, calmer heads prevail, and many seem to understand that they need to take a longer-term view and try to ride it out.”
Consumers have experienced many ups and downs in the market recently, and the number of people who say they are too nervous to invest reflects that, as percentages fluctuate from quarter to . Currently, 41% of consumers say they are too nervous to invest in the market (compared with 35% in Q4 2019).
Impact on Retirement Savings
Interestingly, Americans still seem optimistic about their ability to recover retirement savings after a market decline. Nearly 70% believe that, even if the market continues to decline, they will have time to rebuild their retirement savings. “Many investors have been through big drops before, and for the most part understand that what goes down almost always goes back up,” said LaVigne. “Hopefully, people have already taken steps to mitigate market risks that could impact retirement before the market plummeted, like diversifying or moving money into protection products.”
Allianz Life conducted an online survey, the 2020 Q1 Allianz Life Quarterly Market Perceptions Study March 19-22, 2020 with a nationally representative sample of 1,003 respondents age 18+. Allianz Life conducted an online survey, the 2019 Q4 Allianz Life Quarterly Market Perceptions Study in November 2019 with a nationally representative sample of 1,005 respondents age 18+.