Insight Into The Mind Of The Risk-Averse Investor
- Created: Monday, 20 December 2010 00:23
It turns out that 12% of all investors that MFS talked to identify themselves as being "fearful." They are quite a pessimistic bunch: 89% are worried about the stock market taking another big dip and 71% think the economy will be lousy through at least 2015. A full 54% say they'll never feel comfortable investing in stocks again.
These people are hungry for investment advice -- about half say they're overwhelmed by the choice of products out there and another 48% are more eager to work with an advisor than ever -- but advisors need to know how to work with them.
The fearful consider themselves savers and not investors. Many (39%) have decreased their retirement contributions. And most (62%) would rather accept low returns if it meant minimizing their risk -- 37% of their assets are currently in cash right now.
They don't need constant hand-holding. At most, they say they'd be happy with an email a week, a monthly call and a quarterly office visit. An advisor who can give them that in a tone that acknowledges their fears may be able to help them out and maybe down the road rebuild their confidence in the markets.