Investors Trust Their Instincts, Not Data, When It Comes to Inflation and Interest Rates

“Gut Feel” May be Misleading Investors on How Economic Factors Affect their Portfolios

Latest Income Study from Nuveen Finds Advisors Can Help Investors Across All Age Groups

NEW YORK--()--Investors’ personal perceptions on inflation—not hard economic data—are a greater influence on how they plan for retirement later and spend their money today, according to the latest income investing survey from Nuveen.

Nuveen commissioned The Harris Poll to conduct the online survey of more than 1,000 high-net-worth investors as part of its ongoing efforts to assess the scope and complexity of investors’ needs and desired outcomes. In the second release of its findings, investors demonstrated a high level of awareness that inflation and interest rate risks might impact their investment income. However, many investors shared a different view in their understanding of how those factors might impact their investment portfolio and steps they might take in a rising rate, higher inflation environment. This latest survey extract follows Nuveen’s recent release of the study’s “Avoid Loss and Guarding Gains” findings. Highlights from the study include:

Investors Are Watching Inflation

  • When it comes to inflation in the United States, investors generally trust their personal experience (76%) more than statistics calculated by the United States Department of Labor (24%).
  • Most say they pay close attention to inflation as they plan for retirement (68%), invest (62%) or spend money (57%).
  • More than seven in 10 investors (75%) correctly recognize that inflation is currently low. Also, they largely understand that retirees experience higher inflation rates than the norm (71%).
  • Yet, investors tend to think the U.S. inflation rate is much higher than it actually is:
    • Six in 10 (60%) incorrectly say the inflation rate is 5% or higher or admit that they are not sure, and only one in three investors (32%) are near the real number of 2% to 3%.
  • In the end, three-quarters of investors (77%) surveyed agree the economic situation will make investment planning more complex.

Interest Rates Paint an Even More Complex Picture

  • Most investors (86%) agree they have experienced high interest rates in their lifetime. Within this group, 79% of Millennials (ages 18-37) stated they have experienced high interest rates in their lifetime.
  • On the topic of interest rates, many investors are uncertain as to what happens to bond values when the Federal Reserve Bank increases interest rates.
    • Four in 10 (40%) believe bond values will increase,
    • Three in 10 (30%) believe they will decrease, and
    • Three in 10 (30%) believe the value of bonds will either remain the same or don’t know.
  • Investors are also split on whether they would change their investments in response to a hike in a Federal Reserve interest rate.
    • Slightly more than half (52%) signaled they would likely make an investment change as a result of interest rate hikes
    • 48% were either not very likely or not at all likely to make an investment change as a result of interest rate hikes
    • Among Millennials, however, more than eight in 10, (81%) indicated they would likely make changes to their portfolios due to interest rate hikes.

Investors are Looking to their Financial Advisors for Help in Understanding True Inflation and Interest Rate Risk and Build their Income Portfolio

  • One significant point of unity among investors: slightly more than nine in 10 say they’re interested in income strategies that keep up with inflation (93%).
  • Regardless of age group, Millennials (ages 18-37), Gen Xers (ages 38-52) and young Boomers (ages 53-63) are especially likely to want solutions on ways to generate income in retirement (Millennials, 92%; Gen Xers, 94%; young Boomers, 90%) and to want an advisor to help them better grasp how the cash income can come from their portfolios (Millennials, 94%; Gen Xers, 93%; young Boomers, 91%).
    • More than three out of four investors (77%) rely on a financial advisor—either a moderate or a great deal—to help with retirement income planning.
  • Further, 56% of investors indicated that in the next six months they would like to discuss with their financial advisors a portfolio that can generate a steady stream of cash income while seeking to preserve capital.

Financial Advisors are uniquely positioned to help clients understand the complex relationship between inflation, rising interest rates and investors’ income portfolios. Nuveen provides a robust resource guide of information as well as strategies to diversify income. Nuveen encourages advisors to take advantage of the following resources to engage clients on the issues important to achieving their investment goals.

The Need For Income Diversifiers - Is Your Portfolio Providing The Income You Need?

Timely Market Commentary

Income White Papers

About the 2018 Income Diversifiers Study

The survey was conducted online by The Harris Poll on behalf of Nuveen within the United States between February 22 and March 8, 2018 among 1,010 US adults aged 21+ with at least $100,000 in investable assets who are primary or shared decision makers for financial decisions for themselves or their family, and are currently working with a financial advisor. Figures for gender, age, race/ethnicity, household income, investable assets, education, household size, employment status, marital status, and region were weighted where necessary to bring them into line with their actual proportions in the population.

About Nuveen

Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $973 billion in assets under management as of 6/30/18 and operations in 16 countries. Its affiliates offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit

Nuveen Securities, LLC, member FINRA and SIPC.

The information contained on the Nuveen website is not a part of this press release.



Kathleen Cardoza


Kathleen Cardoza