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Long-Term Focus Eludes Many — Especially Gen X

Retirement saving messages often emphasize the importance of a long-term perspective, but a new survey finds that many American investors have trouble doing so.

When it comes to evaluating investments, 36% of respondents look to one-year performance as the most important indicator of an investment’s return, and an additional 16% look no further than quarterly performance as most important, according to a new TIAA-CREF survey.

And while this activity is likely outside their retirement savings accounts, nearly half (47%) of survey respondents say they have purchased a fund based on its performance during the previous year rather than looking at its performance over a longer time period, according to the survey conducted by an independent research firm via an online survey of 1,000 adults who are employed, contribute to an employer-sponsored retirement plan or an individual retirement account, and are either responsible for or share in financial decision making for their household.

For Gen Y, they survey’s authors say the challenges posed by unpredictable markets and their impact on investing decisions are even more pronounced in that while 29% of all respondents believe that all investments offer the same level of risk, 40% of Gen Y report the same. Moreover, 64% of Gen Y think that higher risk guarantees higher returns, compared with 53% of all respondents.

Consider that more than a third (36%) of respondents overall say that volatility is the most likely reason they would rebalance their portfolio, though only 15% of the so-called Silent Generation (age 70 and older), for Generation X, which came of age in a time of limited market volatility, 41% say they would rebalance in response. Other reasons for rebalancing:


  • 23% of all respondents say nearing retirement age would most likely prompt them to rebalance

  • 21% of all respondents pointed to a regular time of the year, such as the end of the year, a birthday or another significant date

  • 20% of all respondents cited life changes, such as the birth of a child or grandchild, death of a spouse or a similar situation

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