From big-ticket spending to long-term planning for their futures, American investors are taking a more conservative approach to handling their money, according to industry professionals.
The
The ICI polled 3,000 American households for the study, which it conducted in November and December.
The study also found that more than half of households with retirement accounts or other financial investments indicated they had not changed their investment strategies.
Financial advisers know full well that American investors started taking things a bit slower since the onset of the 2008 downturn, so the results shouldn’t be surprising. Yet Brandt Sakakeeny, the managing partner at Purchase, N.Y.-based Rockingstone Advisors, sees valuable lessons from the ICI study.
“There is more of a commitment to perhaps live a little more conservatively,” Sakakeeny said. “That means not getting a second mortgage to pay for a vacation home. There is a little more prudence and maybe not stretching.”
As far as investing goes, prudence is replacing abstinence in the minds of investors, evidently.
“There is decent volume coming in around new client interest,” Sakakeeny said. “Given the fact that most folks have a lot of undeployed cash, when they call and say they are ready to do something, I just think it means the visibility is a little better now.”
In other findings, most defined contribution plan participants continued to make regular investments through their 401(k)s, but they also borrowed a little more from them. At the end of September 2010, 18% of defined contribution plan participants had loans outstanding, compared with 16.5% of participants at yearend 2009 and 15.3% at yearend 2008.
Donna Mitchell writes for Financial Planning.
