Americans, including retirees, are looking to return to stocks to regain the steep losses they suffered in 2008 and are optimistic they will accomplish this, Prudential Financial found in a survey of 1,001 Americans aged 45 to 75 with $100,000 or more in retirement savings.
On average, these investors say they lost more than 33% of their assets last year, but 62% are confident they can grow back this lost money by participating in their workplace retirement plans. Sixty-six percent believe they will accomplish this within the next five years.
Seventy-three percent of retirees said they are exploring new ways to grow their assets, and 75% said a product with guarantees for lifetime income, protection of principal and opportunities to lock in market gains is an attractive option.
However, their reaction to stocks is far more skeptical than it was to years ago, with 70% saying that being too aggressive with investments is riskier than being too conservative. In 2007, 50% said that was true.
“There’s no doubt that investor confidence suffered over the last year, which left Americans a bit shaken as they absorbed the shock to their account balances,” said Jacob Herschler, senior vice president of development for Prudential Annuities. “As a result, many investors have shifted their focus from that frustration to planning. They are using what they’ve learned from this period to carefully evaluate their next financial moves so that they can rebuild their retirement savings.”
Thus, as a positive sign, 77% said they will pay more diligent attention to their investments following the recession, 66% would likely invest in a guaranteed income product, and 66% said they would likely turn to a financial professional for information and guidance.