More Americans Fear Recession Is Around The Corner
MINNEAPOLIS - Americans’ fear of a recession continues to rise, as half of Americans now say they are worried a major recession is coming, according to the latest Allianz Quarterly Market Perceptions Study. This number, up steadily from 48% in Q2 and 46% in Q1, shows that consumers are increasingly anxious about the effects of market volatility on their finances, according to the Q3 findings from Allianz Life Insurance Company of North America (Allianz Life). Similarly, an increasing amount of respondents say they are worried a big market crash is on the horizon (48% in Q3 compared with 47% in Q2 and 46% in Q1).
“Market volatility didn’t take a vacation this summer,” said Kelly LaVigne, vice president of Advanced Markets, Allianz Life. “With major fluctuations over the past quarter, it’s not surprising that Americans are skittish about investing and worried that a market crash and recession might be around the corner.”
Interestingly, while all generations are increasingly rattled by the markets, millennials continue to be more concerned than Gen Xers and baby boomers about a coming recession or market crash, with 56% saying they are worried about a recession being right around the corner, compared with 51% of Gen Xers and 46% of boomers. At the same time, millennials seem to be getting used to the ups and downs of the roller coaster market as they are over twice as likely than boomers to say they are comfortable with market conditions and ready to invest now (47% of millennials and just 17% of boomers).
“While millennials might be most worried about a recession, they seem to be feeling more at peace about their situation – likely because they have more time to recover from any major losses,” said LaVigne.
Potential Impact on Retirement Needs to Remain Top of Mind
The study also indicated a potentially damaging mindset developing with Americans in regards to their own retirement: fewer respondents said it’s important to have some retirement savings in a financial product that protects from loss (66% in Q3 compared with 72% in Q2).
“On the surface it might appear to be good news that less people seem concerned about protecting their retirement savings from loss,” said LaVigne. “However, this ongoing market volatility needs to serve as a wake-up call that protecting retirement assets is important as we don’t know what the market will throw at us in the coming months and years ahead.”
To that end, consumers are increasingly seeking to balance growth and protection, with nearly a quarter of respondents interested in putting some money into a financial product that offers modest growth potential, with no potential loss (24% in Q3 compared with 18% in Q2).
“There are a range of financial products that allow for protection while still maintaining upside potential,” said LaVigne. “Now is the ideal time to work with a financial professional to help protect retirement savings even if the market continues to fluctuate.”
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