Legg Mason’s 2017 Global Investment Survey finds that U.S. investors are still substantially influenced by the “shadow” of the 2007-2008 financial crisis and continue to make cautious investment decisions that ultimately could hinder their long-term potential for higher returns.
When asked what is the extent of influence of the global financial crisis and subsequent recession on their saving and investment decisions, a total of 65% of U.S. respondents said they were either “still strongly” or “still somewhat” influenced. For global respondents, the results were not quite as high, with 57% of respondents saying they were either still strongly or somewhat influenced.
The impact appears to be most severe among Millennials, with almost 6 in 10 saying the global financial crisis “strongly” impacts their investment decisions. Millennial investors also responded that they are more conservative about risk than U.S. investors in general, with 85% describing themselves as either “somewhat or very conservative.”
Overall, investors appear to be slightly more optimistic, albeit still cautious, after nearly a decade in which they mostly wanted to protect capital and invest in low-yielding bonds. As many as 37% of global investors are planning to take on more risk in their portfolios, with as many as one tenth of respondents saying they are ready to take even much more risk. At the opposite end, 11% of the global investors interviewed said they plan to be more cautious.
Perhaps not surprisingly, emerging market investors expressed the highest appetite for risk, with 60% of Mexican investors ready to take on more risk in their investments, followed by 56% in Hong Kong, 53% in Brazil and 51% in China, according to the survey.
On the cautious side, European investors do not appear ready to embrace higher risk, the report noted. Swedes are the most conservative, with only 13% ready to take on more risk, followed by Germans (15%), the Swiss (20%) and Belgians (22%). The Japanese reportedly are among the most pessimistic, with 19% calling for a more cautious strategy.
Globally, more than one third of those ready to embrace risk are considering domestic stocks, while 30% favor real estate, 24% consider international equities, and 10% contemplate at non-traditional investments, the report shows.
Conducted by Cicero Research, this year's survey reached 15,300 investors in 17 countries across Europe, Asia Pacific, Latin America and the United States. The survey also includes questions about the use of technology as a financial tool and whether investors favor human interaction when making investment decisions.
