04 December 2023

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Where do investors look for shelter?

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The year 2022 was an annus horribilis for financial markets, with many indices indicating a -20% decline for several months. For investors, it was a bitter awakening from the rapid post-COVID rally. How have they managed and are managing this complicated and volatile market phase with their portfolios? On which assets are they redirecting their wealth?

According to a survey by Spectrem Group, the most common action taken by investors in the current market context is to seek refuge in liquidity (many investors make this choice without consulting an advisor, which could lead to incorrect allocation). The second most popular choice is to increase the portion of conservative investments, which may not experience significant price movements during periods of volatility. Cryptocurrencies and alternative investments are seen as a shelter from market volatility by a very small percentage.

There are slight differences in the decisions of investors based on both their wealth and age. The wealthiest investors (with assets exceeding 15 million euros) are the most aggressive (25% of them have increased the portfolio allocation to stocks. They also lead in increasing investment in bonds). On a generational level, the research reveals a paradox regarding the younger investors: while they are more inclined than older investors to shift their wealth towards more conservative investments, they are also the most determined to increase their equity investments. Finally, it has emerged that Millennials turn to their financial advisors more during periods of high stock market volatility compared to their older counterparts.