Concerns about external events such as market volatility and inflation have Americans valuing workplace pensions and low-risk investments over permanent work from home and paid vacations
BOSTON, March 10, 2022–(BUSINESS WIRE)–As we approach the second anniversary of the U.S. COVID-19 shutdown, Fidelity Investments® today shared insights that reveal consumers are taking new steps to adapt their investing habits and attitudes, with the majority making changes to redefine their long-term financial goals.
According to the study, more than three in five American adults (63%) are actively investing 1 have changed their investing habits in some way since the start of the COVID-19 pandemic, with around three-quarters (76%) prioritizing long-term gains over short-term when investing and more than three in five (63%) prioritizing low-risk, low-reward investments over risky, high-reward trades. Seven in ten (70%) focus more on the money they make from an investment than the type of business they invest in. save, inflation being a major concern at the moment compared to the pre-pandemic period.
“Over the past two years, we have seen an increased emphasis on short-term investing and spending habits, but while this period of turbulence due to the pandemic, market volatility, inflation and geopolitical events continues, we are seeing shifts toward longer-term investing to plan and save,” said Roberta King, vice president and branch manager of an investor center at Fidelity Investments. “These shifts have an impact on how people choose to spend, save and invest their money, on their own and through their employer’s pension plan.”
Following some of the trends stemming from the events of the past two years of uncertainty – “the YOLO economy”, “revenge trips” and “the great resignation” for example – the latest Fidelity survey identified that American consumers have Made three key shifts since the start of the pandemic toward long-term saving and investing, including:
Change their spending habits – Americans would rather put money in an emergency fund (65%) than spend money on vacation (35%), save money for retirement (79%) than saving money for a wedding or other big event (21%), and contributing $100 to their 401(k) (62%) rather than spending $100 on a feel-good purchase (38%). The choice to put money in their 401(k) over a wellness purchase is especially true when it comes to individuals with a retirement plan (72%). Additionally, more women (81%) prioritize saving for retirement over saving for a wedding or other big event. According to another recent study by Fidelity, 58% of women say the pandemic has influenced the way they think about money and make financial decisions.
Adapt your investment habits – Among Americans who are active investors, many have started investing for the first time (9%), have increased the amount of their investments (20%) and changed the types of investments they make (19%) since the start of the pandemic. They also prioritize long-term pension plans over short-term benefits: nearly three in five (57%) would prefer their current pension plan to be more company-based than additional paid time off compared to what they currently get (43%), and more than half (56%) would prefer a good pension plan fit to full-time remote work (44%). Interestingly, consumers between the ages of 18 and 35 tend to disagree about paid vacations. More than half (54%) of these young investors, who are experiencing the conjunction of these external events for the first time in their lives, would rather have more days off work than a pension plan adequacy policy in higher business.
Discover their need for financial education – Half (51%) of Americans who are currently investing and/or saving in some way feel like they are not investing as much as they would like, with many attributing this to a lack of knowledge about investment (31%). The study found that those who work with a financial advisor for help with education and advice are much more likely to prioritize long-term financial goals, choosing things like a plan stronger company pension plans (72% vs. 57% overall) rather than higher paying programs. more free time (28% vs. 43% overall) than the general population. Budgeting and saving (85%), inflation (81%) and retirement accounts (78%) are the top areas Americans find important to successfully manage their finances.
“This isn’t the first priority shift we’ve seen from consumers since the pandemic began and I doubt it will be the last,” Roberta King said. “We are seeing continued record growth at Fidelity in terms of customers, assets and engagement, in part due to continued market volatility over the past two years, reinforcing the need for financial education. We are here to help people navigate these changes and provide guidance as the landscape continues to evolve.”
About the study
This study presents the results of a national online survey of 2,557 adults aged 18 and older. Interviews for this survey were conducted February 17-22, 2022 by YouGov, which is not affiliated with Fidelity Investments. Figures have been weighted to be representative of all US adults. The results of this survey may not be representative of all adults meeting the same criteria as those interviewed for this study. The theoretical sampling error for all respondents is ±/-1.94% at 95% confidence.
About Fidelity Investments
Fidelity’s mission is to inspire a better future and deliver better results for the customers and businesses we serve. With assets under administration of $11.8 trillion, including discretionary assets of $4.5 trillion as of December 31, 2021, we are focused on meeting the unique needs of a diverse set of clients. Privately owned for 75 years, Fidelity employs more than 57,000 associates who are focused on the long-term success of our clients. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.
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1″Active investing” includes those who invest personally, through the company’s pension plan, or through a paid financial professional
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