Just when we thought we could breathe a little easier after 2008's market free fall, Prudential Financial's new survey shows investors remain leery of risk exposure. In fact, despite the slowly recovering markets, 60 percent say they want as many guarantees on their financial future as they can get.
While 401(k) plans may have rebounded to pre-meltdown levels, mutual fund investors have bridled their portfolios to a level that's just as focused on managing risks as generating good returns, says Judy Rice, president of Prudential Investments.
"As a result, they are looking to real assets and market neutral and fixed income products to protect against the threat of inflation and market volatility," she says.
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How much have trust levels dropped off? Fifty-eight percent of individual investors responding to the survey said they've lost confidence in the stock market and 44 percent say it's not likely they'll ever put more money back into it.
Even Cubs fans have more faith than that.
Along with their apprehension to take chances, investors' continued distrust of the financial services industry proves this country hasn't gotten over the Madoff scandal and the flare of Ponzi scheme coverage that subsequently followed.
Those scoundrels are much of the reason why nearly 70 percent of investors believe there are few trustworthy financial services firms out there.
But cautious investing doesn't constitute disdain for the markets, or for retirement plans and the advisors that service them—only that investors are taking time to think. The survey found 72 percent admit they need to reconsider how they save, invest and plan for retirement.
If only politicians could be that rational.
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