Market Volatility Fuels Risk Averse Stance Among Investors

KEY FINDINGS:

• 51% say they made changes to their investments to make them less risky or more conservative because of recent market volatility
• 59% say they are looking to add more protection to their portfolio after recent market volatility
• 74% worry that the upcoming elections will cause more market volatility

MINNEAPOLIS – Sept. 24, 2024 – Following recent market volatility, the majority of Americans want to reduce risk in their financial strategy and bolster their portfolio against future volatility, according to the 2024 Q3 Quarterly Market Perceptions Study* from Allianz Life Insurance Company of North America (Allianz Life).

Many Americans are addressing the risk of market volatility in their financial strategy. Most Americans (51%) say they made changes to their investments to make them less risky or more conservative because of recent market volatility. Millennials especially are worried about market conditions. More millennials (58%) say they made changes to their investments to make them less risky or more conservative, compared to 46% of Gen Xers and 41% of boomers.

Furthermore, the majority of Americans (59%) say they are looking to add more protection to their portfolio after recent market volatility. Millennials are also more likely to say they are looking to add more protection to their portfolio after recent market volatility (68%) than Gen Xers (60%) and boomers (47%).

Many worry about continued volatility and a potential economic downturn. Nearly three in four (74%) worry that the upcoming elections will cause more market volatility and 49% worry that another big market crash is on the horizon.

“Americans are feeling unsettled by some recent market volatility,” says Kelly LaVigne, VP of consumer insights, Allianz Life. “A well-constructed financial strategy that can withstand market ups and downs can help Americans avoid fear from brief swings in the market.”

While inflation has been a top concern recently, fewer Americans expect inflation to get worse. About two in three (66%) say they expect inflation will get worse over the next 12 months. This is down from 71% in Q2.

More Americans seek professional help

More Americans plan to connect with their financial professional following recent market volatility. About three in five (61%) say they recently have or plan to reach out to their financial professional because they are concerned about recent market conditions. This is up from 51% in Q2 2024.

“Short-term fluctuations in the market are normal,” LaVigne says. “Your long-term financial strategy should be resilient from temporary turbulence. Working with a financial professional can help you to create a strategy that addresses the risk of market volatility to keep you on track.”

With that, 73% say they would stop using their current financial professional if they didn’t help them reduce exposure to market volatility.

*Allianz Life conducted an online survey, the 2024 Q3 Quarterly Market Perceptions Study in August 2024 with a nationally representative sample of 1,005 Respondents age 18+.