Please ensure Javascript is enabled for purposes of website accessibility Retirement Confidence Report: 5 Financial Lessons - Janus Henderson Investors
For Individual Investors in the US

Retirement Confidence Report: 5 Financial Lessons

Retirement Director Ben Rizzuto discusses how the findings from Janus Henderson’s Retirement Confidence Report – distributed to our direct investors in October 2022 – offer valuable insight on how to stay focused on long-term financial goals.

Ben Rizzuto, CFP®, CRPS®

Ben Rizzuto, CFP®, CRPS®

Wealth Strategist

Jun 5, 2023
7 minute read

Last year, we asked you, our direct investors, several questions regarding the market, the economy, and your level of confidence.

The survey was distributed to over 250,000 investors in October 2022. For purposes of this retirement confidence report, the analysis of responses was restricted to investors age 50 and older and those who were the sole or shared financial decision-maker for their households. The final sample consisted of 1,926 investors who completed the full survey. While we didn’t know it at the time, the S&P 500® Index had reached its trough following a nine-month bear market. Inflation was between 7%-8%, and the Federal Reserve had made several interest rate increases.

Markets have improved and inflation has eased since then. But a series of prominent bank failures over the past few months have riled markets and caused investors to feel uneasy yet again.

With that in mind, I’d like to share some findings from our survey, along with five lessons those findings can teach us about staying focused on our long-term goals.

How concerned are individual investors about the stock market and inflation?

In late 2022, 79% and 89% of respondents said they were “very concerned” or “somewhat concerned” about the stock market and inflation, respectively.

While it’s normal to feel anxious during times of volatility, I would encourage investors to think about how they can stay focused on their long-term goals. One way to do this is to make a promise to yourself; specifically, vow not to make any changes to your portfolio for a specific period. It could be three months, six months, or even longer, but making that promise helps put time between the emotional present and when we might make a change in the future. It also leverages our behavioral tendency to want to make good on our commitments.

How have the stock market performance in 2022 and rising inflation impacted investors’ retirement confidence?

We were pleased to find to find that 54% of respondents said their retirement confidence levels had not changed. But for investors who weren’t feeling confident amid last year’s volatility – or those who are feeling anxious now – what are some ways to boost confidence?

Research has shown that those who review and decide upon their financial goals, then incorporate those goals into a written financial plan, exhibit less negative stress and are more confident in their financial futures. If you haven’t already done so, I’d encourage you to sit down with your spouse or partner and take the time to develop your goals and create a plan.

If you already have a plan in place, periods of volatility are excellent opportunities to review what’s truly important to you. This can help gauge the progress you’re making toward your goals so you can stay on course.

Have individual investors moved out of stocks and bonds due to current economic conditions?

Respondents’ continued confidence through last year’s volatility led to another positive finding: Just 14% opted to move money out of stocks or bonds and into cash.

While a relatively low percentage, it’s worth noting that those 14% of investors likely reached a point where they said, “I can’t take it anymore!” Financial losses understandably evoke many emotions, but it’s important to remember that timing the market is impossible – especially since many of the market’s worst days have occurred close to the best days.

How has the performance of the stock market and inflation impacted investors’ current and planned household spending behaviors?

We found that 41% of respondents had already reduced their spending as inflation was trending up late last year. What I found interesting was how this decision was made: Only 30% of respondents made decisions collaboratively with their spouse. This is an opportunity for those who employ a solo decision-making process to bring their significant other into the conversation. Research has shown that when financial decisions are made jointly, confidence increases.

What are individual investors’ expectations for the stock market one year from now?

As of last October, 60% of respondents believed the S&P 500 would either be a lot or a little higher in one year, and 26% believed the Index would either be a lot or little lower.1

While the S&P 500 is a major index that serves as the benchmark for many investments, it should not be viewed as your “personal benchmark.” Rather, your benchmark is your financial plan, as well as your short-, medium-, and longterm goals.

While volatility, inflation, and economic uncertainty may make us uncomfortable in the short term, implementing and sticking to a long-term plan can help turn down the heat of the emotional present so we can stay focused on our future goals. Part of that long-term plan could include a systematic investing plan which allows you to create a solid financial habit and invest smaller amounts over time, which may feel less aggressive than a large one-time investment.

1 Kansas State University

Stay committed to your long term goals, start an automatic investment today

Past performance is no guarantee of future results.

Investing involves market risk and it is possible to lose money by investing. Investment return and value will fluctuate in response to issuer, political, market and economic developments, which can affect a single issuer, issuers within an industry, economic sector or geographic region, or the market as a whole.

There is no assurance the stated objectives(s) will be met. Investment return and fund share value will fluctuate and it is possible to lose money by investing.

The decision to open or purchase into a Janus Henderson account is an important one and Janus Henderson does not provide any advice or recommendations as to whether you should do so. Carefully consider all of your available options, which may include but is not limited to keeping your assets in your current account(s). Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment-related expenses, account fees, available investment options, distribution options, legal and creditor protections, tax treatment, and other concerns specific to your individual circumstances. The Janus Henderson Referral program and the Referral Bonus payment should not be determinative factors in your decision to open a new Janus Henderson direct account.

A program of regular investing does not assure a profit or protect against depreciation in a declining market. Since a consistent investing program involves continuous investment in securities regardless of fluctuating prices, you should consider your financial ability to continue purchases through periods of various price levels.

The opinions and views expressed are as of the date published, are subject to change and may not reflect the views of others in the organization. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use.

The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may change over time so it may be appropriate to evaluate strategy with the assistance of a financial professional. Federal and state laws and regulations are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information.

S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance.

Index performance does not reflect the expenses of managing a portfolio as an index is unmanaged and not available for direct investment.

Janus Henderson is a trademark of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc.