Three out of four U.S. investors 40 and older are concerned about a stock market correction, yet more than a third say they are uncertain what they would do with their savings if they pulled it from the stock market, according to survey results announced Tuesday by Global Atlantic Financial Group.
Virtually all respondents said the market at its current levels had risks, and 37% said the risk was significant or mostly risky.
Ebiquity, a global market analytics firm, conducted the poll in October and November among 1,005 U.S. investors with investments in the stock market through stocks, exchange-traded funds, mutual funds, 401(k)s or IRAs.
According to Global Atlantic, the typical U.S. investor 40 and over has $210,051, on average, currently invested in the stock market, while retired investors have an average of $236,148 invested in the market.
Even with stock market risk concerns high, 69% of investors said their investment vehicles were subject to stock market volatility. Fifty-nine percent of employed investors said a major stock market drop would inhibit their ability to retire when they wanted, while 25% of those already in retirement said it would disrupt their retirement.
Pollsters asked investors how the 2008 financial crisis and stock market decline had affected the value of their savings and investment portfolio. Nine percent reported a loss of more than 50% in value, 23% said a loss between 25% and 50% in value and 34% said a reduction of 10% to 25% in value.
Sixteen percent of respondents could not recall the change in value.
"Investors felt the pain from the 2008 financial crisis, but our study indicates many are not prepared for another significant downturn and the impact it could have on their retirement," Paula Nelson, president — retirement at Global Atlantic Financial Group, said in a statement.
"It's clear that investors need a better strategy to protect themselves from future market corrections and volatility, especially as they enter their peak earning years and prepare for and enter retirement."
The survey results gave some indication why investors continue to stay with equity investments. Fifty-two percent believe that the stock market can sustain continued growth for the next five years without a downturn of 10% or more. Forty-eight percent do not believe this can happen.
