In terms of investments, 14% of Baby Boomers and Matures each state that their personal savings is mostly invested in stocks or mutual funds - a greater proportion than younger generations say the same.
"Current economic conditions seem to be driving somewhat less risky investment behavior by Gen Xers, which goes against the grain of traditional investment advice," stated Barbara Bertner, Vice President of Financial Services Research for Harris Interactive. "A combination of trust and education would likely bring these consumers back into alignment with traditional investment thinking."
Other results of this survey include:
- Most people with bank accounts have heard nothing (24%) or only a little (35%) about new rules about overdrafts requiring bank customers to sign an annual agreement to permit their bank to approve payments that exceed their balances. While two in five (41%) bank customers say they know all about these new rules, only one in every six (16%) have "opted in" for this service.
- A 31% plurality of all adults report that they keep their personal savings "mostly in bank savings and and/or CDs", 17% keep "a relatively equal mix of stocks/mutual funds and investments such as bonds and money market funds", 11% keep their personal savings "mostly in stocks and/or mutual funds", 8% keep theirs "mostly in bonds, money market funds and other stable investments", and just over a quarter of all adults (27%) say they have no personal savings or investments;
- The relatively small proportions of adults who keep an "equal mix" of their personal savings in equities (stocks or mutual funds) is somewhat higher among Baby Boomers and people over 65 (23% and 22% respectively) than it is among those aged 45 or younger (between 7% and 18%);
- When asked specifically about their retirement savings, rather more people report having these invested "mostly" (18%) or "an equal mix" (22%) in stocks and mutual funds. However, 34% of all adults have no retirement savings, including 25% of Baby Boomers and 22% of people aged 65 or older; and,
- Most people have not changed the portfolio mix in the last 6 months of either their personal savings and investments (70%) or their retirement savings and investments (74%). Relatively small numbers have moved their investments into or out of stocks, bonds, bank savings, money market funds and CDs.
So What?
It is concerning if Americans are depleting both short and long term investments to make ends meet today—many may not have retirement savings when they need it. Financial experts have traditionally advised younger investors to invest heavily in equities for the long term and older investors to move more of their savings into less volatile investments. It is interesting to see how few people under 45 (and indeed in all age groups) have adjusted to this advice given current economic conditions. It seems Gen Xers are keeping money out of the markets in favor of less risky investments, possibly a result of being skittish about market conditions. As Bertner states above, companies who understand Gen Xers investment attitudes and present new products with that in mind will generate a greater share of wallet among this group.
