The Menlo Park, Calif.-based Quicken/SurveyMonkey online poll was taken earlier this month, which consisted of a sample of 1,200 US adults ages 18 to 74 from the Cint Consumer Network, according to Quicken’s press release.
The findings
The survey revealed that nearly three-fourths who responded to the survey (71%) ranked inflation (currently at 7% and the highest since the early 1980s), as the top concern, followed by new COVID-19 variants, supply chain disruptions and a stock market crash. On that last point, the survey noted that 52% surveyed agree that there will be a stock market crash in the next five years. Of that group, 58% expect a looming stock market crash will impact their finances negatively, according to the press release. Yet not everyone views a potential crash as such a bad prospect. Some Americans saw the financial gains that more aggressive investors had made from the day of the 2008 stock market crash, and are now looking to capitalize for the next one. According to the press release, 52% of self-described “aggressive” investors are likely to say the 2008 crash benefited them financially, compared to 18% of so-called “conservative” investors. What’s more, 71% of aggressive investors, compared to 20% of conservative investors, believe a stock market crash in the future would benefit them financially. A notable percentage of respondents who believe there’s going to be a crash in the next five years – 35% – agree that they’re waiting for a crash in order to invest some extra cash. A sizable percentage of younger adult generations surveyed – Millennial and Gen Z – also see the benefits to a future stock market crash. According to the survey, 41% of Gen Z and 36% of Millennials agree that they are waiting for a stock crash in order to invest their extra cash. Another 30% of Gen Z and 28% of Millennials say they’re waiting for a crash so that they can start investing, according to the press release. Curiously, retirement and job security, normally cited as two major worries for Americans, fell to the bottom of the list of issues the surveyed respondents felt are most worried about in 2022.
How are Americans preparing for a market crash?
The Quicken survey revealed that many Americans are taking an assertive approach with their portfolios, adjusting accordingly for possible volatility. More than one-third, 37% of respondents, said they already have or plan to adjust their asset allocation in 2022 to prepare for a stock market crash. Those respondents include wealthier groups and the younger Millennial and Gen Z groups. Specifically, 49% of people with incomes between $200,000 and $499,000, and 73% of people who make more than $500,000 — and 49% of Gen Z and 46% of millennials — are most likely to have already made, or plan to make, adjustments to their asset allocation in preparation for a crash, according to the finding in the press release. Forty-one percent of the survey respondents plan to do nothing should a market crash occur, while 42% plan to buy stocks. And 26% said they’re likely to move money into an alternative asset like crypto or NFT.
A matter of trust
The Quicken survey shows that Americans across generations are likely to follow the advice of their financial advisor suggests should a market catastrophe occurs, while Gen Z and Millennials are very likely than older generations to listen to their family and friends or turn to social media for advice. The breakdown of the numbers are as follows:
49% are likely to do what their financial advisor suggests.29% are likely to do what their family or friends suggest.16% would turn to social media for advice. (Twenty-one percent of Gen Z and 29% of Millennials would turn to social platforms as a source for advice.
“Americans are feeling the impact of inflation across their daily expenses, which is why it’s on everyone’s mind,” said Quicken CEO Eric Dunn. “It’s important to understand exactly how economic changes, such as inflation and an unsteady stock market, impact our daily lives, and to have a handle on your personal finances so that you are prepared for the uncertainties ahead,” Dunn said in the press release. The timing of Quicken’s survey coincides with the US Federal Reserve’s recent announcement that it will tighten monetary policy at a faster rate by raising interest rates three times this year starting in March. A recent Reuters poll in mid-January predicts the median forecast to be between 0.75% and 1.00% by the end of the year.
