Five years after the sweeping economic crisis upended global markets, most investors in the U.S. and worldwide remain risk averse, and hold a sizable percentage of their assets in low- or no-return cash investments, according to the first-ever Global Investor Pulse Survey from BlackRock (NYSE:BLK).
Despite steady gains in recent years that have pushed some stock markets to all-time highs, most people are not comfortable taking on more risks to achieve better returns, according to the global survey – one of the largest ever, spanning 17,567 investors including 4,000 Americans, across a range of income levels. (For more on the survey and its methodology, please see www.blackrock.com/investorpulse.) The results reflect a global investment environment still plagued by uncertainty, policy confusion and political dysfunction.
While affluent investors (those with more than $250,000 in investable assets) expressed greater confidence about their financial futures, even they - along with investors of all types around the world – tend to hold a lot of cash, with no immediate plans to change their investment mix. In the U.S., investors of all types held 48% of investable assets in cash, with 18% in stocks and 7% in bonds. Equity ownership rates are highest in Hong Kong and Taiwan, countries that also have high overall rates of household savings.
And while many investors say earning income is important to them, they aren’t certain how to do it: Nearly 50% of affluent investors feel that income-generating investments are riskier than they were five years ago, and the majority of both affluent and other investors declined to describe themselves as “knowledgeable” about the best ways to generate income in today’s markets.“More than ever in a new world ushered in by crisis, people at all income levels need answers on how to better manage their money for the future,” said Robert S. Kapito, President, BlackRock. “They’re understandably unnerved and are holding too much of their money in assets that are earning them nothing or that will lose value if interest rates rise. We need to let them know it is still possible for them to achieve their retirement and other long-term goals but they need to take action.”