Americans' tolerance for investment risk-taking increased significantly between 2013 and 2014, according to new research.
So reports Hearts & Wallets in its annual "Investor Mindset" study. The report analyzes attitudes and behaviors of investor life stages from age 21 through post-retirement and is drawn from the Hearts & Wallets Quant Panel Database.
The 5,500-U.S. household study shows the rise in comfort for market volatility was most marked among "mid-career investors," those ages 40-52. When asked whether they're prepared to take risks with investments by accepting volatility in the hope of securing a higher return, (one-third) 34 percent of mid-career investors expressed a willingness to do. This compares with 24 percent in 2013, a 10-point increase.
Other investor segments, from "emerging" millennials (ages 21-27) to post-retirees (ages 64 and older) also expressed greater comfort for market volatility, the rise in risk tolerance ranging from 1 to 6 points. (See chart below.)
Commenting on "early career investors" (ages 28-39), the report observes that a desire to partake of investment opportunities now outweighs their aversion to potential financial loss.
"A big turnaround for the generation that grew up during the Great Recession is their growing concern about missing out on investment growth versus the risk of losing money in the markets," the report states. "The concern of younger investors about missing out on investment growth is both in comparison to their own views of several years earlier, and to older investors in 2014."
