Investors Becoming More Tolerant of Market Volatility

Respondents Worried about Rising Healthcare Costs

Gen X and Millionaire Investors Climbing a Wall of Worry

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Results from the 2015 MFS Investing Sentiment Study (Graphic: Business Wire)

BOSTON--()--Just over seven years since the beginning of the Global Financial Crisis many investors have become more tolerant of big swings in market volatility, according to the latest results from the MFS Investing Sentiment Insights Survey. More than 70 percent of investors surveyed say the ups and downs of the past few years are part of a normal market cycle. And although almost six in 10 investors are concerned about a major drop in the stock market over the next 12 months, 93 percent said they would either add to their holdings or do nothing as a result of recent market volatility. The fifth annual MFS Investing Sentiment Insights Survey, which was conducted from September 1-9, 2015, included 936 investors and 620 advisors.

"This year's survey was conducted during a period of extreme market volatility, so it's encouraging that investors are beginning to embrace a longer-term approach -- avoiding the urge to sell at the first sign of trouble," said Jim Jessee, Head of Global Retail Distribution with MFS. "Volatility often creates investment opportunities and selling into a market downturn almost never pays off."

Healthcare and gridlock top investor concerns

Healthcare tops the list of investor concerns over the next 12 months with 70 percent of investors saying they are extremely concerned about rising costs. Meanwhile, 68 percent of those surveyed are very concerned about legislative gridlock and 62 percent of respondents are worried about global political instability. Of financial advisors surveyed, 44 percent believe a major drop in the markets is the top concern for investors. However, only 14 percent of investors say it's their number one concern.

"Most investors are worried about a number of issues that could affect their financial security," said Doug Orton, vice president of Business Development for MFS. "Financial advisors can add value by helping investors focus on maximizing their health care and retirement savings."

Gen X feeling the pinch

In the 2015 survey, sentiment among Gen X investors plummeted: 67 percent of Gen X investors say they're more concerned than ever about being able to retire when they thought they would, up from 54 percent in 2014. Furthermore, 58 percent of Gen X survey respondents say they have lowered expectations for their quality of life in retirement, versus 43 percent in 2014. And 42 percent of Gen X investors say they will never feel comfortable investing in the stock market, compared with 27 percent last year.

"While most investors surveyed greeted this summer's market volatility with a collective shrug, Gen X investors, who experienced two major market downturns early in their careers, seem to be more prone to pessimism," said Orton. "Given that 68 percent of Gen X investors are extremely concerned about a reduction in social security benefits, they may need to become more comfortable with equities to make up for potential retirement shortfalls down the road."

Mounting concerns for millionaires

Another group of investors that are concerned about recent volatility are millionaires. Only 28 percent of millionaires surveyed identified US stocks and stock mutual funds as an excellent or very good place to invest, down from 56 percent in 2014. Millionaire respondents painted a similar picture for international equities. Only 15 percent favor international equities, versus 33 percent in 2014.

Millionaires are also growing increasingly concerned about the economic outlook. Of those surveyed, 45 percent say they are optimistic about the outlook for the economy, down from 59 percent in 2014. Likewise, 27 percent of millionaires surveyed describe themselves as fearful or pessimistic, up from 8 percent in 2014.

For more results from the ongoing MFS Investing Sentiment Insights Survey, click here.

About the current survey
MFS, through Research Collaborative, an independent research firm, sponsored an online survey from September 1-9, 2015, of 936 individual US investors with $100,000 or more in household investable (nonretirement) assets and 620 licensed US financial advisors (either FINRA or SEC) who have been licensed for at least three years with $500,000 or more in annual mutual fund sales. All investor respondents make or share in making financial decisions for their households. MFS was not identified as the sponsor of the survey. Millennial (Generation Y) investors are those under the age of 36; 205 participated in the survey. Generation X is defined as investors between the ages of 36 and 50; 200 participated in the survey. Baby boomer investors are those between the ages of 51 and 69; 294 participated in the survey. There were 237 participants age 70 or older.

About MFS Investment Management
Established in 1924, MFS is an active, global asset manager with investment offices in Boston, Hong Kong, London, Mexico City, São Paulo, Singapore, Sydney, Tokyo and Toronto. We employ a uniquely collaborative approach to build better insights for our clients. Our investment approach has three core elements: integrated research, global collaboration and active risk management. As of November 30, 2015, MFS manages US$424.5 billion in assets on behalf of individual and institutional investors worldwide. Please visit mfs.com for more information.

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Contacts

MFS Investment Management
Dan Flaherty, 617-954-4256
or
James Aber, 617-954-6154

Release Summary

Many investors more tolerant of big swings in market volatility, according to the MFS Investing Sentiment Study. Respondents worried about healthcare costs, Gen X and Millionaire investors worried.

Contacts

MFS Investment Management
Dan Flaherty, 617-954-4256
or
James Aber, 617-954-6154